TRICN INC: MOSAID Tech to Acquire Assets in $3.1 Million DealTROPICAL SPORTSWEAR: United States Trustee Objects to PlanUAL CORP: Court Extends Exclusive Right to File Plan Until July 1UAL CORP: Asks for Prelim. Injunction Against Port of PortlandUS AIRWAYS: Inks Merger Pact with America West

WINN-DIXIE: U.S. Trustee Objects to Some Employment ApplicationsWINN-DIXIE: Wants to Extend Reclamation Deadline to June 30WINN-DIXIE: Wants to Pay PACA Claims Without Further Delay

* BOOK REVIEW: The Rise and Fall of the Conglomerate Kings

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ACTUANT CORP: Completes $93 Million Hydratight Sweeney Acquisition------------------------------------------------------------------Actuant Corporation (NYSE:ATU) said it completed its Hydratight Sweeney acquisition. Total consideration for the previously announced transaction was approximately $93 million with proceeds being funded from Actuant's existing credit facilities. Hydratight Sweeney, with headquarters in Birmingham, United Kingdom, manufactures and provides bolting products and services to the oil and gas, power generation, industrial, and other end-user markets.

Commenting on the transaction, Robert C. Arzbaecher, Actuant President and CEO, said, "Hydratight Sweeney continues Actuant's bolting initiative. Combined with our existing Enerpac and Hedley Purvis organizations, we now have $90 million of bolting related product sales and 500 employees operating in 20 countries worldwide."

Hydratight Sweeney will report into the Enerpac business and be included in Actuant's Tools & Supplies segment. Mark Goldstein, Executive Vice President of Actuant and Tools & Supplies Segment Leader, stated, "We identified the bolting market as a key growth driver for our Enerpac business two years ago and determined that developing a complete product line including service was critical to our success. Hydratight Sweeney accomplishes this, adding product, service and scale to our portfolio. Combining the capabilities of Hydratight Sweeney, Hedley Purvis and Enerpac enables us to offer customers a full line of joint-integrity solutions on a global basis."

About the Company

Headquartered in Glendale, Wisconsin, Actuant Corp. -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 25 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Formerly known as Applied Power, Actuant was created in 2000 after the spin-off of Applied Power's electronics business segment into a separate public company called APW Ltd. Since 2000, Actuant has grown its sales from $482 million to over $1 billion and its market capitalization from $113 million to over $1.4 billion. The company employs a workforce of more than 5,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU.

* * *

As reported in the Troubled Company Reporter on Feb. 10, 2005,Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Actuant Corp., following the company's acquisition in December 2004 of Key Components, Inc., from an investor group for $315 million. The acquisition included the assumption of $80 million of debt of KCI's operating company, Key Components LLC. The ratings on Actuant have been removed from CreditWatch where they were placed Nov. 22, 2004, after Actuant announced its intent to acquire KCI. The ratings on Key Components were removed. The outlook on Milwaukee, Wisconsin-based Actuant is stable.

"The ratings affirmation reflects our earlier indication that ratings would remain unchanged if management fulfilled its announced intent to issue equity in conjunction with the debt issuance undertaken to fund the KCI acquisition," said Standard & Poor's credit analyst Nancy Messer. "Although Actuant's leverage has increased somewhat pro forma for the acquisition, it remains at a level consistent with the 'BB' rating because of management's effort to balance the capital structure. The KCI acquisition demonstrates management's willingness to temporarily increase leverage in order to execute an attractive acquisition."

AFM HOSPITALITY: Court Appoints Mintz & Partners as Receiver------------------------------------------------------------The Ontario Superior Court of Justice placed AFM Hospitality Corporation (TSX:AFM) in interim receivership, upon application by AFM's principal secured lender, on Apr. 29, 2005. The intent of the interim receivership is to protect the assets of AFM and its interest in its wholly owned subsidiaries.

Mintz & Partners Limited was appointed Receiver of AFM.

The Receiver is empowered and authorized (but not obligated) to, among other things, take possession and control of any of the property of AFM and to carry on its business and deal with its property. The Court Order was granted pursuant to Section 47(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended, and Section 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, and provides AFM with creditor protection by staying all proceedings and the exercise of any remedies against AFM or its property. The Court Order also stays proceedings and the exercise of any remedies against a wholly owned subsidiary of AFM or its property.

The Receiver has been informed that Mr. Lawrence Horwitz, Mr. Per-Odd Keul, Mr. Ron Erickson and Mr. Andre Tatibouet had resigned from the Board of Directors of AFM. As such, it appears there are currently no directors of AFM.

AFM has received notification from the Toronto Stock Exchange that its common shares will be suspended from trading on May 20, 2005. AFM is also subject to cease trade orders issued by the securities commissions of Ontario, Manitoba, British Columbia and Quebec.

AMERICA WEST: Inks Merger Pact with US Airways----------------------------------------------America West Holdings Corporation (NYSE: AWA) and US Airways Group, Inc. (OTC Bulletin Board: UAIRQ) disclosed an agreement to merge and create the first full-service nationwide airline, with the consumer-friendly pricing structure of a low-fare carrier. Operating as the first national low-cost hub-and-spoke network carrier, customers can look forward to simplified pricing, international scope, access to low-fare service to over 200 cities across the U.S., Canada, Mexico, the Caribbean and Europe, and amenities that include a robust frequent flyer program, airport clubs, assigned seating and First Class cabin service.

"Building upon two complementary networks with similar fleets, closely-aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline," America West Holdings Corporation Chairman, President and CEO Doug Parker said. "Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve. A combined US Airways/America West places the new airline in a position of strength and future growth that neither of us could have achieved on our own."

"US Airways has a strong franchise and great employees that will be enhanced by America West's strengths and success in the low-fare, low-cost marketplace," US Airways President and CEO Bruce Lakefield said. "That we have secured such an impressive slate of equity investors and partner support in a period of such industry uncertainty is a strong indication of the prospects and enthusiasm for this transaction. It has been my objective to ensure the long-term viability of US Airways and the security of our outstanding employees; this merger with America West will accomplish that objective."

Subject to approval by the U.S. Bankruptcy Court overseeing US Airways' pending Chapter 11 case and transaction closing, which is anticipated to occur this fall, the merged airlines will operate under the US Airways brand under the leadership of CEO Doug Parker. The merged airline's 13-member board will be comprised of:

-- one member from each of three new equity investment companies, -- six members from the current America West board, including Mr. Parker as chairman, and

-- four members from the current US Airways board, including Mr. Lakefield as vice-chairman.

The combined airline's headquarters will be consolidated into America West's headquarters in Tempe, Ariz. For regulatory purposes, both airlines will operate under separate operating certificates for a transition period of two to three years, keeping flight crew, maintenance and safety procedures for each airline separate. To ensure that the substantial consumer benefits are realized quickly, however, the airlines will work together to coordinate schedules, frequent flyer programs and other marketing programs as soon as practical.

"We believe that the airline created from the merger of US Airways and America West will bring more choices for customers, as we expand the low-fare pricing structure of America West to dozens of new cities, while also offering passenger-service amenities, such as an attractive frequent flyer program, assigned seating and a First Class cabin," Mr. Lakefield added.

Customers

With the creation of the first full-service nationwide airline, customers will enjoy simplified pricing across an expanded east/west network along with access to international destinations. Both airlines' frequent flyer programs will ultimately be combined once the merger is complete. Members of both programs will retain all of their miles and elite status designation and will receive similar benefits in the merged airline's frequent flyer program. Other customer amenities will include access to airport clubs, assigned seating and First Class upgrades.

Financing

The merger is expected to create one of the industry's most financially stable players, with over $10 billion in annual revenues and a strong balance sheet that includes approximately $2 billion in total cash at closing with which to weather the current industry environment and fund further growth strategies. The airline's strong cash balance is expected to be created through:

-- a combination of current cash on hand at US Airways/America West, -- $350 million of new equity commitments (which may be supplemented with additional commitments), and

-- Eastshore Holdings LLC, ($125 million commitment and agreement to provide regional airline services), which is owned by Air Wisconsin Airlines Corporation and its shareholders.

The merged company also plans to conduct a rights offering that could provide an additional $150 million of equity financing.

Approximately $675 million of additional cash financing is being secured through a combination of refunding of certain deposits, debt refinancing (which reduces collateralization) and signing bonuses from companies interested in long-term business relationships with the merged airline. The companies have signed commitments or firm proposals for more than $425 million in additional cash liquidity from strategic partners and vendors, including over $300 million in a signing bonus and a loan from prospective affinity credit card providers for the merged company. Negotiations with credit card companies are still in progress. Another $250 million will come from Airbus in the form of a loan. The companies have also agreed that the merged company will be the launch customer for the Airbus A350, with deliveries scheduled from 2011 to 2013.

Synergies

"We are exceptionally pleased with the financial support this transaction has received, but it would not be available if we did not have a business model that worked in today's difficult industry environment," said Mr. Parker. "We have created a competitive business that is profitable even with oil prices at $50 per barrel, achieved primarily because of the $600 million of annual net operating synergies. These synergies are higher than generally experienced in airline mergers for two reasons. First, US Airways and America West now have very similar labor costs so there are no large negative synergies related to contract integration, and second, US Airways' bankruptcy allows us to right-size capacity, thus increasing the network synergies."

The $600 million in anticipated annual synergies are the result of route restructuring, revenue synergies and cost savings. Route restructuring synergies of approximately $150-200 million are created by reducing aircraft and unprofitable flying, better matching aircraft size to consumer demand by route and incorporating Hawaii service into the network. Revenue synergies of $150-200 million are achieved by taking two largely regional airlines and creating one nationwide, low-cost carrier that can provide more choice for consumers when combined with improving connectivity across both airlines' networks and by increasing aircraft and other asset utilization. Lastly, the combined airline expects to realize cost synergies of $250-300 million annually by reducing administrative overhead, consolidating both airlines' information technology systems and combining facilities.

In addition to the operating synergies created by the merger, the new relationship with Air Canada provides for even greater operating improvements. The merged airline and Air Canada plan to work together to create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement, which could include codesharing with Air Canada, consistent with the U.S.-Canada bilateral aviation agreement.

Fleet/Route System

US Airways/US Airways Express currently serves 179 cities and America West/America West Express serves 96 cities. When merged, the combined airline will become the nation's fifth largest airline, as measured by domestic Available Seat Miles (ASMs). The combined airline is expected to operate a mainline fleet of 361 planes (supported by 239 regional jets and 57 turboprops for feed into the mainline system), down from a total of 419 mainline aircraft operated by both airlines at the beginning of 2005.

US Airways projects returning 25 additional aircraft by the end of 2006, in addition to the 46 aircraft that US Airways already has announced it plans to return. Nearly all of the aircraft are being returned to General Electric Capital Aviation Services (GECAS). The combined airline also will take delivery of 13 Airbus A320 family aircraft previously ordered by America West Airlines. Airbus has also agreed to reschedule and reconfirm 30 narrow body A320-family aircraft deliveries from 2006 - 2008 to 2009 - 2010. To rationalize international flying, the merged company will work with Airbus to transition to an all-Airbus international fleet of A330 aircraft and, beginning in 2011, A350 aircraft.

Once fully integrated, the airline plans to have primary hubs in Charlotte, Phoenix and Philadelphia, and secondary hubs in Las Vegas and Pittsburgh. The merged airline plans to have focus cities in Boston, New York/LaGuardia, Washington, D.C., and Fort Lauderdale.

People/Culture

US Airways currently employs 30,100 people and America West employs 14,000 people. Contract integration of represented employees is expected to occur after integrated seniority lists have been negotiated between each respective airline's labor groups.

"Although US Airways and America West are clearly two different airlines with two different cultures, our common traits far outnumber our differences," America West's Mr. Parker continued. "We are all aviation professionals proud of our heritage, eager to serve the traveling public and hopeful for the future. While seniority integration will be a challenge for us and our employees, we will ensure that those issues are discussed and resolved in a fair and equitable manner. Throughout this process, as has always been the case, we will continue our commitment of open and honest communication with our employees. We are building a new future that will present far greater job security and growth opportunities than either airline would have achieved on its own, and we are doing so with the ability for all to share in the collective upside."

Equity Allocation

The $350 million of private equity commitments are based upon a total implied private full equity value of $850 million for the merged corporation. Of that $850 million valuation, 45 percent will be allocated to America West, 41 percent to the new equity and 14 percent to US Airways. This valuation results in an implied value of $6.12 per share for the publicly traded America West stock, taking into effect dilution from outstanding warrants and options and the anticipated treatment of convertible securities. The partners have agreed that up to $650 million of total equity can be raised including any proceeds from planned a rights offering. Any additional equity would dilute all participants pro rata. However, any additional equity raised above $350 million will not reduce the $6.12 per share of implied value for the publicly traded America West stock. The right to participate in a rights offering for up to $150 million in common shares of the merged companies is to be allocated 61.5 percent to the stakeholders of US Airways and 38.5 percent to the common stockholders of America West.

Approvals

Under the terms of the agreement, the merger is expected to occur subsequent to confirmation of US Airways' plan of reorganization and emergence from Chapter 11. Because the merger and related equity investments are subject to US Airways' pending Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria, the transaction will also have to be approved by the U.S. Bankruptcy Court and will be subject to a competitive bidding process that will be proposed to the Court. The transaction, which has been approved by both company's boards of directors, is also subject to the approval of America West's shareholders.

Both airlines will file the necessary documents for review with the U.S. Department of Justice, the U.S. Department of Transportation and the Securities and Exchange Commission as well as secure other necessary regulatory approvals. In addition, both airlines hold loans with a federal guarantee from the Air Transportation Stabilization Board (ATSB), and the carriers are in joint negotiations with the ATSB on the treatment of those loans under the proposed merger.

US Airways Group, Inc., is being advised by Seabury Group LLC as restructuring advisor and financial advisor and the law firm of Arnold & Porter LLP; advisors for America West Holdings Corp. include Greenhill & Co., LLC as its principal financial advisor, Merrill Lynch & Co. as structuring advisor to certain financings, and the law firms of Skadden, Arps, Slate Meagher and Flom, LLP and Cooley, Godward LLP.

Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of:

Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts.

America West -- http://www.americawest.com/-- operates more than 900 flights daily to 95 destinations in the U.S., Canada, Mexico and Costa Rica. The airline's 13,500 employees are proud to offer a range of services including more destinations than any other low-cost carrier, first-class cabins, assigned seating, airport clubs and an award-winning frequent flyer program.

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As reported in the Troubled Company Reporter on Apr. 25, 2005, Standard & Poor's Ratings Services placed selected ratings on America West Holdings Corp. and subsidiary America West Airlines Inc., including the 'B-' corporate credit rating on both, on CreditWatch with negative implications. Ratings on selected enhanced equipment trust certificates (EETCs) of America West Airlines Inc., which were placed on CreditWatch on Feb. 24, 2005, as part of an industry wide review of aircraft-backed debt, remain on CreditWatch.

"The CreditWatch placement is based on the potential combination of America West with US Airways Inc. (rated 'D'), the major operating subsidiary of US Airways Group Inc. (rated 'D'), both currently operating under Chapter 11 bankruptcy protection," said Standard & Poor's credit analyst Betsy Snyder. "The combination could present significant labor integration and financial challenges, depending on how any such combination is structured."

AMERICAN BUSINESS: U.S. Trustee Names G. Miller as Ch. 7 Trustee----------------------------------------------------------------Kelly Beaudin Stapleton, the United States Trustee for Region 3, appoints George L. Miller as trustee to oversee the liquidation of American Business Financial Services, Inc., and its debtor-affiliates' estate pursuant to Chapter 7 of the Bankruptcy Code.

Mr. Miller has until May 22, 2005, to notify Frank J. Perch, III, the Assistant U.S. Trustee, in writing if he decides not to accept the appointment.

Headquartered in Philadelphia, Pennsylvania, American BusinessFinancial Services, Inc., together with its subsidiaries, is afinancial services organization operating mainly in the easternand central portions of the United States and California. TheCompany originates, sells and services home mortgage loans throughits principal direct and indirect subsidiaries. The Company,along with four of its subsidiaries, filed for chapter 11protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203). The cases were converted to Chapter 7 on May 17, 2005. Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,083,396,000 intotal assets and $1,071,537,000 in total debts. (AmericanBusiness Bankruptcy News, Issue No. 15; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ARMSTRONG: Wants Precautionary Appeal from Plan Denial Stayed-------------------------------------------------------------As previously reported, Armstrong World Industries, Inc., filed a notice of appeal with the United States Court of Appeals for the Third Circuit from Judge Robreno's decision and order denying the confirmation of AWI's Fourth Amended Plan of Reorganization. Because the District Court exercised original jurisdiction over confirmation of the Plan under 28 U.S.C. Section 1334, AWI believes that any appeal of the Order is properly to the Third Circuit.

AWI, nonetheless, filed a precautionary appeal from the decision and Order with the District Court, which appeal has not yet been docketed.

Although the caption of the Order reads "United States District Court for the District of Delaware," the case number referenced in the caption is the number associated with AWI's Chapter 11 case, which is pending before the Bankruptcy Court. Since no separate District Court docket was ever created in connection with the Plan confirmation, AWI filed a Precautionary Appeal as a protective measure.

Accordingly, AWI and the Official Committee of Unsecured Creditors, as counterparty to the Precautionary Appeal, stipulate and agree that:

(1) The Precautionary Appeal and all related deadlines will be stayed pending disposition by any means of the Third Circuit Appeal.

(2) Nothing will constitute a waiver by the Creditors Committee of any right to assert any claims, defenses, or objections in connection with the Third Circuit Appeal or the Precautionary Appeal, including any right to seek dismissal on any ground.

(3) No party will take any action in the Precautionary Appeal pending resolution, dismissal or other disposition of the Third Circuit Appeal unless so directed by the Bankruptcy Court or the District Court.

ASSET BACKED: Moody's Downgrades Class A Notes to B3 From Baa3--------------------------------------------------------------Moody's Investors Service has downgraded the Asset Backed Funding Corporation, NIM Trust 2001-AQ1 Class A notes. Net Interest Margin transactions such as this one represent the securitization of excess spread, prepayment penalties and cap payments generated by the underlying residential mortgage backed securities. These residual cashflows are sensitive to a number of factors including:

* prepayment speeds;

* cumulative losses incurred on the underlying deal's collateral;

* impact of a step-down date; and

* breach of triggers.

Moody's has downgraded this NIM securitization based upon performance of the underlying deals that has negatively impacted future residual payments to the NIM holders. The underlying deal, ABFC Mortgage Loan Asset-Backed Certificates Series 2001-AQ1, has not remitted any cash other than prepayment penalties to the NIM bonds since reaching its step-down date in April of 2004. Excess cashflows in the underlying deal have been used to cover losses, pay down the senior bonds because the of failing triggers or to build overcollateralization when passing the triggers.

Over the same period, the NIM has continued to pay current interest by virtue of prepayment penalty collections and releases from the deal's interest reserve account, but as the deal has entered its fourth year it is anticipated that the collection of prepayment penalties will gradually diminish and the interest reserve, which already has a low balance, may eventually be depleted.

Complete rating actions is:

Issuer: Asset Backed Funding Corporation, NIM Trust 2001-AQ1 Notes

Downgrade:

* Class A, Previously: Baa3, Downgraded to B3

ATA AIRLINES: Court Allows Ambassadair to Execute Charter Pact--------------------------------------------------------------Debtor Ambassadair Travel Club, Inc., asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to execute a charter agreement with TransMeridian Airlines, Inc.

Ambassadair is a travel club offering charter vacation trips to its members, flying them from the Indianapolis International Airport to various destinations. In the past, ATA Airlines, Inc., provided the aircraft for these trips.

According to Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana, ATA Airlines has determined that using its aircraft for scheduled services provides a better return to the estates than continuing to provide charters to Ambassadair.

Additionally, with ATA Airlines' decision to reduce its flights in Indianapolis, the cost of chartering its aircraft would be increased by the cost of ferrying an airplane to Indianapolis. These business decisions by ATA Airlines have caused Ambassadair to seek charter opportunities outside of ATA.

Ms. Hall relates that TransMeridian has offered an economical solution to Ambassadair's needs for chartering an aircraft. Pursuant to the All-In Aircraft Charter Agreement, Ambassadair will be entitled to use TransMeridian's McDonnell-Douglas MD-83 aircraft beginning June 1, 2005, through December 31, 2005. The Charter may be extended upon notice and subject to further negotiations of price and rate.

"The Charter will allow Ambassadair to fulfill its obligations to its members in a manner that contributes to the economic health of Ambassadair, providing value to its estate and its creditors," Ms. Hall says.

Unions Respond

The Association of Flight Attendants and the Air Line Pilots Association advise the Court that the Charter Agreement may implicate provisions of the Collective Bargaining Agreement, currently governing the ATA Airlines, Inc. and its debtor-affiliates' employees the Unions are representing.

While they are committed to working with the Debtors and any relevant parties to attempt to consensually resolve any issues in relation to the Charter, the Unions reserve their rights as to any unresolved disputes under the CBAs.

* * *

Judge Lorch authorizes Ambassadair to execute the Charter with TransMeridian.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 23; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ATA AIRLINES: Chicago Express Wants to Reject Three Contracts-------------------------------------------------------------Chicago Express Airlines, Inc., and Pan Am International Flight Academy are parties to an Exclusive Training Services Agreement dated May 1, 2003. Under the Agreement, Chicago Express is entitled to use Pan Am exclusively for outside pilot training.

Chicago Express and the Bank of Blue Valley are parties to a Plain Language Equipment Lease, pursuant to which Chicago Express leases de-icing equipment from the Bank.

Chicago Express and Aeronautical Radio, Inc., are parties to a GLOBALink/VHF Aeronautical Data Communications Service Agreement and an Aeronautical Mobile Ground Station Administration Agreement. ARINC provides Chicago Express with various radio communications services.

Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis, Indiana, relates that ATA Airlines, Inc. and its debtor-affiliates have undertaken efforts to sell the assets or stock of Chicago Express. In the auction held on March 31, 2005, Okun Enterprises, Inc., emerged the highest and best bidder. However, Okun has refused to close the sale. Accordingly, Chicago Express will not exercise its authority to assume the Agreements and assign them to Okun.

Chicago Express ceased flight operations on March 28, 2005, and as a result, Chicago Express has no use for the goods, services and equipment provided by the Agreements.

Pursuant to Section 365 of the Bankruptcy Code, Chicago Express seeks the U.S. Bankruptcy Court for the Southern District of Indiana's authority to reject the Agreements, effective when it:

(i) tenders notice of the rejection to the counterparty of the Agreements; or

(ii) surrenders possession of the personal or real property subject to the Agreements.

Mr. Nelson notes that Chicago Express is only seeking authority to reject the Agreements. It needs to preserve its rights under those Agreements while it continues to investigate a sale of its stocks or assets. Chicago Express needs the flexibility to either:

-- assume and assign some or all of the Agreements if a purchaser intends to acquire them; or

-- quickly relieve its creditors and its estate of burdensome executory contracts and leases if no purchaser wishes to acquire them.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 23; Bankruptcy Creditors'Service, Inc., 215/945-7000)

ATLANTIC MUTUAL: Fitch Affirms & Withdraws Ratings --------------------------------------------------Fitch Ratings has withdrawn the insurer financial strength ratings on the Atlantic Mutual Companies and the ratings on Atlantic Mutual Insurance Company's surplus notes, due to a lack of market interest. Immediately prior to the withdrawal, Fitch affirmed the ratings at 'BBB-' and 'B+', respectively. The Rating Outlook remained Negative prior to the withdrawals. A complete list of companies and ratings appears below.

These ratings were affirmed with a Negative Outlook and subsequently withdrawn by Fitch:

Atlantic Mutual Insurance Company

-- Insurer Financial Strength 'BBB-'; -- Surplus Note 'B+'.

Centennial Insurance Company

-- Insurer Financial Strength 'BBB-'.

Atlantic Lloyd's Insurance Company of Texas

-- Insurer Financial Strength 'BBB-'.

AVADO BRANDS: Exits Chapter 11 as a Private Company---------------------------------------------------Avado Brands, Inc., has emerged from the Chapter 11 bankruptcy from which it originally filed on Feb. 4, 2004. Avado Brands is the parent company of the Don Pablo's Mexican Kitchen and Hops Grillhouse and Brewery restaurant brands.

At emergence, Avado Brands completed the process to become a privately held company and, accordingly, its common stock has been delisted from trading on the OTC Bulletin Board.

"[Thurs]day marks the beginning of a 'new Avado,'" said Raymond P. Barbrick, president and chief executive officer of Avado Brands. "I want to thank our senior management and every team member -- from the restaurant level to the home office -- for their belief in this company and for their commitment to operating great restaurants for our guests in every market we serve. Together, we're building a stronger company that promises to have a very bright future."

On Feb. 4, 2004, Avado Brands filed voluntary petitions in the U.S. Bankruptcy Court for the Northern District of Texas for relief under Chapter 11 of the U.S. Bankruptcy Code. The company continued to operate the majority of its restaurants during the restructuring despite having to make the difficult decision of closing several units.

In October 2004, Mr. Barbrick was named president and chief executive officer. Mr. Barbrick, with more than 30 years' experience in the restaurant industry, is the former president and chief operating officer of Bertucci's Corporation, based in Northborough, Mass. By early 2005, Mr. Barbrick expanded his senior management team with the additions of Kurt Schnaubelt as executive vice president and chief financial officer, Robert Hogan as senior vice president of marketing and strategic planning, and William H. Marvin as vice president of purchasing. These new appointments complemented the executive team already in place:

Together, this senior management team has been responsible for planning and executing the company's turnaround strategy. Mr. Barbrick noted that, since February 2005, both the Don Pablo's and Hops concepts have experienced positive sales and traffic growth.

During its restructuring period, Avado received sufficient liquidity through a $60 million debtor-in-possession credit facility wholly provided by funds and accounts managed by DDJ Capital Management LLC of Wellesley, Mass. Through the conversion of its existing bonds into common stock of the reorganized company as a part of the bankruptcy process, as well as the purchase of $17.5 million of preferred stock of the company, funds and accounts managed by DDJ Capital Management will become the majority equity owner of Avado Brands. In addition to the $17.5 million of preferred stock financing, DDJ-managed funds and accounts will provide funding to the company upon emergence from bankruptcy through $22.5 million in term debt, as well as a $30 million revolving line of credit - for a total commitment of approximately $70 million. Mr. Barbrick believes DDJ's commitment gives Avado Brands even more options for the future.

"DDJ Capital Management is a strong player in the private equity capital arena. Through their financial strength, we are a well-capitalized company poised for growth. And, as a privately held company, we have more flexibility to plan our future and continue to build on the momentum we've accomplished over the last several months," he added.

David L. Goolgasian Jr., a managing director of DDJ Capital Management, also commented, "DDJ is very pleased with its partnership with Avado. We believe that the restructuring, which has substantially reduced the debt on the company's balance sheet, will allow Avado to become a more profitable enterprise. We look forward to working with Rick Barbrick and the rest of the management team to help Avado reach its full potential." Mr. Goolgasian, along with David J. Breazzano of DDJ Capital Management, have become two of the six members of the board of directors of the reorganized company.

DDJ Capital Management LLC is a boutique investment manager specializing in private equity and debt financings, as well as high yield and special situations investing. Founded in 1996, the Wellesley, Mass.-based investment firm currently manages approximately $3 billion on behalf of 78 institutional clients.

The initial OC for the Group 2 certificates is 1.55% with a target OC of 2.50%. In addition, the ratings on the certificates reflect the quality of the underlying collateral, and Fitch's level of confidence in the integrity of the legal and financial structure of the transaction.

The Group 1 mortgage pool consists of fixed-rate mortgage loans secured by first liens on one- to four-family residential properties, with an aggregate principal balance of $195,604,252. As of the cut-off date, April 1, 2005, the mortgage loans had a weighted average loan-to-value ratio of 83.73%, weighted average coupon of 6.580%, and an average principal balance of $124,351.

Single-family properties account for 88.35% of the mortgage pool, two- to four-family properties 3.01%, and condos 3.30%. Approximately 88.40% of the properties are owner occupied. The three largest state concentrations are California (16.73%), New York (7.15%) and Texas (6.82%).

The Group 2 mortgage pool consists of adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, with an aggregate principal balance of $ 187,458,778. As of the cut-off date, April 1, 2005, the mortgage loans had a weighted average LTV of 80.69%, WAC of 6.129%, and an average principal balance of $181,646. Single-family properties account for 78.22% of the mortgage pool, two- to four-family properties 3.17%, and condos 10.08%. Approximately 89.67% of the properties are owner occupied. The three largest state concentrations are California (15.56%), Florida (8.54%), and Illinois (5.36%).

None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the releases issued May 1, 2003, entitled, 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation' and Feb. 23, 2005, entitled, 'Fitch Revises RMBS Guidelines for Antipredatory Lending Laws,' available on the Fitch Ratings web site at http://www.fitchratings.com/

Bear Stearns Asset Backed Securities I LLC deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. JPMorgan Chase Bank, N.A. will act as trustee. Wells Fargo Bank N.A., rated 'RMS1' by Fitch, will act as master servicer for this transaction.

BOYDS COLLECTION: Poor Performance Prompts S&P to Junk Ratings--------------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings on The Boyds Collection Ltd., including lowering the corporate credit rating to 'CCC' from 'B-'. At the same time, the ratings were removed from CreditWatch, where they were placed with negative implications on April 12, 2005. The outlook is now negative. Gettysburg, Pennsylvania-based Boyds, a distributor and retailer of collectible gifts, had total debt outstanding of $88 million as of March 31, 2005.

The negative outlook reflects Standard & Poor's concern that the company's liquidity is strained and the company may breach covenants if EBITDA does not significantly improve. Ratings could be lowered if the company does not successfully execute its business plan, improve profitability, and generate positive discretionary cash flow over the near term. Improving profitability and liquidity would be important to considering an outlook revision to stable, which Standard & Poor's currently views as an unlikely near-term possibility.

BA has made progress in improving operating performance and reducing net debt, which has contributed to a strengthening of the group's credit profile. Despite a challenging trading environment, Standard & Poor's expects BA's structural cost savings achieved and its ongoing initiatives to allow the group to maintain profitability and continue to improve the credit profile.

In 2005, BA's financial results improved in all regions, reflecting the progress made in reducing its cost base and raising productivity. BA's cost reduction programs are ongoing and should yield further benefits over the medium term. At the same time, the group has used its improving cash flow and substantial disposal proceeds to reduce total balance sheet debt over the past two years by o1.9 billion ($3.5 billion). Standard & Poor's expects BA to continue to reduce debt from excess cash flow. At March 31, 2005, BA had total balance sheet debt of o4.9 billion.

"BA's restructuring program has made good progress and the business has better flexibility to adapt to a hostile price environment. High fuel prices do, however, remain a key challenge to the company and further cost improvement initiatives will be necessary," said Standard & Poor's credit analyst Leigh Bailey. "We expect management's commitment to stronger credit-protection measures and debt reduction to strengthen the company's balance sheet over the coming years."

In the medium term, a further reduction in pension-adjusted leverage and continued improvement in the group's operating margin are likely to result in a review that could result in the rating being raised to investment grade. Deterioration in demand levels or a significant rise in oil prices that cannot be satisfactorily offset could cause the outlook to be revised to stable.

C-BASS: Moody's Upgrades Class B Notes to Baa1 From Ba2-------------------------------------------------------Moody's Investors Service has upgraded the C-BASS 2003-CB6NIM Ltd. NIM Notes Class B notes. Net Interest Margin transactions such as this one represent the securitization of excess spread, prepayment penalties and cap payments generated by the underlying residential mortgage backed securities. These residual cashflows are sensitive to a number of factors including:

* prepayment speeds,

* cumulative losses incurred on the underlying deal's collateral,

* impact of a step-down date, and

* breach of triggers.

Moody's has upgraded this NIM securitization based upon greater than expected cashflows from the underlying securities which has significantly improving the notes' credit quality. The excess cashflow paid to the NIM by the underlying deal, C-BASS 2003-CB6 Trust, has consistently been more robust than originally anticipated. Although the underlying deal is still relatively unseasoned and, subsequently, excess cashflows may decrease over time, such decrease in residual cash flows should have a limited impact on the NIM. The NIM notes also benefit from a cap agreement which has consistently been contributing cash to the deal.

Complete rating actions is:

Issuer: C-BASS 2003-CB6NIM Ltd. NIM Notes

Upgrade:

* Class B, Previously: Ba2, Upgraded to Baa1

CATHOLIC CHURCH: Court Modifies Tucson's Cash Management Order --------------------------------------------------------------As reported in the Troubled Company Reporter on March 23, 2005, Judge Williams authorized, on an interim basis, the Diocese of Spokane and the Parishes to maintain their existing bank accounts.

The U.S. Bankruptcy Court for the Eastern District of Washington rules that the Interim Cash Management Order is continued in full force with no alteration until August 18, 2005.

Judge Williams will convene a hearing to consider further extension and modification of the Cash Management Order on August 18, 2005, at 9:00 a.m., by telephone. The parties may participate in the hearing by calling (509) 353-3183.

"The Court recognizes that if a decision is rendered regarding the scope of property of the estate in the interim there may be a need to modify the provisions of the Cash Management Order prior to August 18, 2005," Judge Williams says.

CENTERPOINT ENERGY: Fitch Affirms Exchangeable Notes at BB+-----------------------------------------------------------CenterPoint Energy, Inc.'s $1 billion commercial paper program is rated 'F3' by Fitch Ratings. At the same time, CNP's outstanding senior unsecured debt securities are affirmed at 'BBB-' and its trust preferred securities and zero premium exchangeable notes at 'BB+'. The Rating Outlook is Stable.

Commercial paper borrowings by CNP will be backed by its $1 billion five-year committed revolving credit facility maturing on March 7, 2010, and will be available for general corporate purposes.

CNP's current ratings and Stable Outlook reflect the company's progress in reducing consolidated indebtedness with net proceeds from the recently concluded sale of Texas Genco Holdings and the expectation that key credit measures will ultimately strengthen to levels commensurate with the rating upon execution of CNP's planned stranded cost securitization. Specifically, upon conclusion of the pending securitization and subsequent retirement of certain debt obligations, Fitch expects CNP's total debt-to-EBITDA ratio to trend toward the low 4.0 times range, a level which is viewed as appropriate for the ratings category given the low volatility exhibited by CNP's electric and gas distribution and interstate gas pipeline businesses.

On Nov. 10, 2004 the Public Utility Commission of Texas determined that CNP will be permitted to recover a true-up balance of approximately $2.3 billion. Subsequent to that decision, the PUCT issued a financing order permitting CNP to recover approximately $1.8 billion of the true-up balance through the issuance of securitization bonds. It is Fitch's understanding that the amount not authorized for securitization by the PUCT will be collected through a separate competition transition charge by CenterPoint Energy Houston Electric, LLC. Based on an authorized return of 11.07% permitted by the PUCT, the non-securitized CTC component should generate other income at CEHE of almost $65 million per annum.

CNP's financing order has been appealed by various interveners with initial hearings in Travis County district court slated for August 2005. Further appeals to the Texas Supreme Court will likely follow. Barring an unforeseen early settlement with intervening parties, the issuance of securitization bonds will be delayed beyond prior expectations of mid-year 2005 as the various appeals work their way through the Texas courts. In Fitch's view, a prolonged delay in completing the issuance of securitization bonds does not place any significant near-term liquidity pressures on the company. Importantly, CEHE has established a two-year committed backstop credit facility to cover the maturity of a $1.3 billion secured term loan in November 2005. In addition, the termination of excess mitigation credits on April 29, 2004, is expected to bolster near-term consolidated cash flows by about $20 million per month on a pre-tax basis.

CITATION CORP: Judge Mitchell Confirms Third Amended Ch. 11 Plan---------------------------------------------------------------- The Honorable Tamara O. Mitchell of the U.S. Bankruptcy Court for the Northern District of Alabama confirmed at a hearing on May 18, 2005, the Third Amended Joint Plan of Reorganization filed by Citation Corporation and its debtor-affiliates. The Debtors filed their Third Amended Plan on May 17, 2005.

Judge Mitchell approved the adequacy of the Debtors' Second Amended Disclosure Statement on March 31, 2005.

Judge Mitchell concludes that:

a) the Plan provides for the same treatment by the Debtors for each Claim or Equity Interest in each Class unless the holder of a particular Claim or Equity Interest has agreed to a less favorable treatment of their Claim or Equity Interest, satisfying Section 1123(a)(4) of the Bankruptcy Code;

b) the Amended Plan's provisions are appropriate, in the best interests of the Debtors and their estates and not inconsistent with the applicable provisions of the Bankruptcy Code, including provisions for:

(i) the disposition of executory contracts and unexpired leases pursuant to Article IX of the Plan,

(ii) the Reorganized Debtors' retention of all Causes of Action the Debtors had or had power to assert immediately prior to the Effective Date, pursuant to Section 4.6 of the Plan, and

(iii) releases of various persons and entities, exculpation of various persons and entities with respect to actions related to or taken in furtherance of the chapter 11 cases and preliminary and permanent injunctions against certain actions against the Debtors, their estates and their properties pursuant to Article V of the Plan;

c) the Amended Plan was proposed in good faith and not by means forbidden by law, satisfying Section 1129(a)(3) of the Bankruptcy Code, and the Plan represents the best interests of creditors, satisfying Section 1129(a)(7) of the Bankruptcy Code;

d) the treatment of Administrative Expense Claims and Other Priority Claims under Sections 3.1 and 3.4 of the Amended Plan satisfies Section 1129(a)(9)(A) and (B) of the Bankruptcy Code, and the treatment of Priority Tax Claims under Section 3.2 of the Plan satisfies Section 1129(a)(9)(C) of the Bankruptcy Code;

e) The Amended Plan satisfies Section 1129(a)(11) of the Bankruptcy Code for its feasibility because confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtors; and

f) All fees payable under 28 U.S.C. Section 1930 have been paid or will be paid pursuant to Section 13.2 of the Plan, satisfying Section 1129(a)(12) of the Bankruptcy Code.

Headquartered in Birmingham, Alabama, Citation Corporation --http://www.citation.net/-- designs, develops and manufactures cast, forged and machined components for the capital and durablegoods industries, including the automotive and industrial markets.Citation uses aluminum, steel, gray iron, and ductile iron as theraw materials in its various manufacturing processes. The Debtorsfiled for protection on Sept. 18, 2004 (Bankr. N.D. Ala. Case No.04-08130). Michael Leo Hall, Esq., and Rita H. Dixon, Esq., atBurr & Forman LLP, represent the Debtors. When the Company andits debtor-affiliates filed for protection from their creditors,they estimated more than $100 million in assets and debts.

CITATION CORP: Has Until June 30 to File Notices of Removal----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama gave Citation Corporation and its debtor-affiliates an extension, through and including June 30, 2005, to file notices of removal with respect to pre-petition civil actions pursuant to 28 U.S.C. Section 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure.

The Court confirmed the Debtors' Third Amended Joint Plan of Reorganization on May 18, 2005.

The Debtors gave the Court three reasons in support of the extension:

a) since the Petition Date, the Debtors and their professionals have not had enough time to review pending litigation related to the Civil Actions and determine whether any of those litigations should be removed because they were focused on completing their reorganization process, including negotiating a chapter 11 plan, which was recently confirmed by the Court;

b) the extension is in the best interests of the Debtors' estates and their creditors and will ensure that the Debtors do not forfeit valuable rights under 28 U.S.C. Section 1452; and

c) the extension will not prejudice the rights of the Debtors' adversaries in the Civil Actions because any party to a Civil Action that is removed may seek to have it remanded to the state court pursuant to 28 U.S.C. Section 1452(b).

Headquartered in Birmingham, Alabama, Citation Corporation --http://www.citation.net/-- designs, develops and manufactures cast, forged and machined components for the capital and durablegoods industries, including the automotive and industrial markets.Citation uses aluminum, steel, gray iron, and ductile iron as theraw materials in its various manufacturing processes. The Debtorsfiled for protection on Sept. 18, 2004 (Bankr. N.D. Ala. Case No.04-08130). Michael Leo Hall, Esq., and Rita H. Dixon, Esq., atBurr & Forman LLP, represent the Debtors. When the Company andits debtor-affiliates filed for protection from their creditors,they estimated more than $100 million in assets and debts. The Court confirmed the Debtors' chapter 11 plan on May 18, 2005.

COLLINS & AIKMAN: Taps Kirkland & Ellis as Bankruptcy Counsel-------------------------------------------------------------Jay B. Knoll, Vice-President and General Counsel of Collins & Aikman Corporation tells the U.S. Bankruptcy Court for the Eastern District of Michigan that Kirkland & Ellis LLP has an extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations. During its preparation of the Chapter 11 Cases, Mr. Knoll discloses that K&E has become familiar with the Debtors' businesses and many of the potential legal issues that may arise in the context of the Chapter 11 Cases.

Accordingly, the Debtors seek the Court's authority to employ Kirkland & Ellis as their attorneys to perform legal services necessary in their Chapter 11 cases, effective as of the Petition Date.

As co-counsel, Kirkland and Ellis will:

(a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties;

(b) attend meetings and negotiations with representatives of creditors and other parties-in-interest;

(c) take all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including objections filed against the estates;

(d) prepare all motions, applications, answers, orders, reports and papers necessary to the administration of the Debtors' estates;

(e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization;

(f) represent the Debtors in connection with obtaining postpetition financing;

(g) advise the Debtors in connection with any potential sale of assets;

(h) appear before the Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those Courts and the United States Trustee;

(i) consult with the Debtors regarding tax matters; and

(j) perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with the Chapter 11 cases.

Kirkland & Ellis received advance payments for its prepetition and postpetition services rendered and expenses incurred on the Debtors' behalf. The Debtors agreed that the prepetition fees are an advance payment and not a retainer.

The Debtors will pay Kirkland & Ellis pursuant to these standard hourly rates:

Richard M. Cieri, Esq., assures the Court that the firm does not hold or represent any interest adverse to the Debtors' estates and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code as modified by Section 1107(b) of the Bankruptcy Code.

Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case Nos. 05-55927). When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts.

* * *

As reported in the Troubled Company Reporter on May 17, 2005, Moody's Investors Service downgraded all debt and corporate ratings for Collins & Aikman Products Co. by two or more notches. Moody's additionally confirmed C&A's weak SGL-4 speculative grade liquidity rating. Moody's outlook after incorporating these rating changes remains negative.

The rating downgrades reflect several adverse new developments announced by C&A on May 12, 2005. It is now Moody's expectation that a reorganization of the company is imminent in the absence of a material infusion of additional funds -- ideally in the form of equity. Moody's now believes that the probable recovery by the company's lenders under the senior secured credit agreement is somewhat impaired, and that the probable recovery by its unsecured lenders is severely impaired.

Collins & Aikman owed Unifi owed approximately $8.2 million, representing 6.4 percent of Unifi's net receivables as of the close of its fiscal third quarter, which ended March 27, 2005. Unifi anticipates taking a pre-tax charge to earnings for this amount during the current quarter, which will impact its EBITDA forecast for the fiscal year ending June 26, 2005. Unifi also expects to conduct business with Collins & Aikman during the Chapter 11 case and after they emerge from the reorganization process.

"Collins & Aikman has been a valued partner throughout Unifi's history, and with proper and prudent safeguards in place, Unifi will support their day-to-day operations during the Chapter 11 process," said Bill Lowe, Chief Operating Officer and CFO for Unifi. "Although the impact on our fourth quarter results will be significant, the strength of our balance sheet will allow us to stay focused on our growth strategies, both domestically and globally."

About Unifi Inc.

Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but are not limited to: Sorbtek(R), A.M.Y.(R), Mynx(TM) UV, Reflexx(R), MicroVista(R) and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear and sewing thread, as well as industrial, automotive, military and medical applications. For more information about Unifi, visit http://www.unifi.com/

Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case Nos. 05-55927). Ray C. Schrock, Esq., at Kirkland & Ellis LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts.

* * *

As reported in the Troubled Company Reporter on May 17, 2005, Moody's Investors Service downgraded all debt and corporate ratings for Collins & Aikman Products Co. by two or more notches. Moody's additionally confirmed C&A's weak SGL-4 speculative grade liquidity rating. Moody's outlook after incorporating these rating changes remains negative.

The rating downgrades reflect several adverse new developments announced by C&A on May 12, 2005. It is now Moody's expectation that a reorganization of the company is imminent in the absence of a material infusion of additional funds -- ideally in the form of equity. Moody's now believes that the probable recovery by the company's lenders under the senior secured credit agreement is somewhat impaired, and that the probable recovery by its unsecured lenders is severely impaired.

* $475 million (increased from $400 million) term loan B due August 2011;

-- Downgrade to Caa2, from B3, of C&A's senior implied rating;

-- Downgrade to Ca, from Caa1, of C&A's senior unsecured issuer rating; and

-- Confirmation of C&A's SGL-4 speculative grade liquidity rating.

COMMUNICATION DYNAMICS: Trustee Can Object to Claims Until Aug. 31------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave AMJ Advisors LLC, the Trustee of the CDI Trust formed under the Second Amended Joint Plan of Reorganization of Communication Dynamics, Inc., and its debtor-affiliates, an extension, through and including Aug. 31, 2005, to object to claims filed against the Debtors' estates.

The Court confirmed the Debtors' Plan on Feb. 25, 2004, and the Plan took effect on April 13, 2004.

Under the Debtors' confirmed Plan, responsibility for claims administration is vested in AJM Advisors as the Trustee for the Debtors' estates.

The Trustee gave the Court four reasons in support of the extension:

a) while the claims administration process for administrative, secured and priority claims is almost complete, the Trustee's review of those claims has been limited due to the uncertainty regarding the extent to which there will be distribution to unsecured creditors because those creditors' recovery depend on the outcome of the pending avoidance actions;

b) although the bar date for the Debtors' bankruptcy cases expired two years ago, some creditors continue to occasionally file proofs of claim with the Bankruptcy Clerk's office and the Debtors' claims agent, which the Trustee needs to address;

c) the Trustee's access to the Debtors' books and records continues to be limited and the extension is necessary so it can file additional objections to claims as it is able to access more information; and

d) the extension will not prejudice the Debtors' creditors and other parties-in-interest.

Headquartered in Annville, Pennsylvania, Communication Dynamics, Inc., is one of the largest multinational suppliers of infrastructure equipment to the broadband communications industry. The Company and its debtor-affiliates filed for chapter 11 protection on Sept. 23, 2002 (Bankr. Del. Case No. 02-12753). Jeffrey M. Schlerf, Esq., and Eric M. Sutty, Esq., at The Bayard Firm and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $100 million both in estimated assets and debts. The Court confirmed the Debtors' chapter 11 plan on Feb. 25, 2004. The Plan took effect on April 13, 2004.

COMMUNICATION DYNAMICS: Entry of Final Decree Delayed to Aug. 31---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved AMJ Advisors LLC's request to delay until Aug. 31, 2005, the entry of a final decree in Communication Dynamics, Inc., and its debtor-affiliates' chapter 11 cases.

AMJ Advisors is the Trustee appointed under the CDI Trust that was formed pursuant to the Debtors' Second Amended Joint Plan of Reorganization. The Court confirmed the Debtors' Plan on Feb. 25, 2004, and the Plan took effect on April 13, 2004.

AJM Advisors gave the Court two reasons why the extension is warranted:

a) the extension will give AJM Advisors more time to complete the post-petition claims administration process, the prosecution of adversary proceedings and the administration of other post-petition matters in the Debtors' chapter 11 cases; and

b) since AJM Advisors is a party-in-interest, the extension will prevent the Debtors' chapter 11 cases from prematurely closing that could prejudice other parties-in-interest and the extension will ensure that any remaining creditor recoveries are addressed and fully maximized.

Headquartered in Annville, Pennsylvania, Communication Dynamics, Inc., is one of the largest multinational suppliers of infrastructure equipment to the broadband communications industry. The Company and its debtor-affiliates filed for chapter 11 protection on Sept. 23, 2002 (Bankr. Del. Case No. 02-12753). Jeffrey M. Schlerf, Esq., and Eric M. Sutty, Esq., at The Bayard Firm and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $100 million both in estimated assets and debts. The Court confirmed the Debtors' chapter 11 plan on Feb. 25, 2004. The Plan took effect on April 13, 2004.

CS FIRST: Moody's Downgrades Class 1-B4 Certificate to Caa2-----------------------------------------------------------Moody's Investors Service has upgraded and downgraded five certificates from a transaction, issued by CS First Boston Mortgage Securities Corp. The transaction is a resecuritization backed by other residential mortgage backed securities.

The Class 1-M1, 1-M2 and 1-M3 certificates from Series 1997-1R are being upgraded based on the level of credit enhancement provided by the subordinated classes. The Class 1-B3 and 1-B4 are being downgraded based on the weak performance of the underlying securities and the reduced credit enhancement level relative to the current projected losses of the underlying securities.

"The upgrade reflects positive operating performance over the past few years and financial metrics that are consistent with an investment-grade rating," said Standard & Poor's credit analyst Kristi Broderick.

The rating is also supported by the final settlement with the SEC regarding the restatement of the company's financial results for the fiscal years 1998 through 2000. The final resolution of the SEC investigation is viewed positively, and Standard & Poor's expects the company to maintain internal controls, financial policies, and credit protection measures consistent with the investment-grade rating.

The ratings on Dollar General Corp. reflect:

(1) its solid position in the "extreme value" retail segment,

(2) consistent track record of profitability, and

(3) strong cash flow protection measures for the rating.

Mitigating factors include the company's participation in the highly competitive discount retail environment and risks associated with its expansion program.

Dollar General is the oldest and largest player in the dollar-retailing segment, operating nearly 7,500 small-box stores across 30 states. Its merchandising strategy is to provide national brands at low prices for its core low-income customer.

"The downgrade is based on the company's weaker-than-expected operating trends in the first quarter of 2005 and our heightened concern about management's ability to turn around a deteriorating performance," said Standard & Poor's credit analyst Diane Shand.

Standard & Poor's also lowered its senior secured debt rating on Duane Reade to 'B-' from 'B', the subordinated debt rating to 'CCC-' from 'CCC'. It also lowered the ratings on the $160 million floating-rate notes due 2010 to 'CCC+' from 'B-', and the $195 million senior subordinated notes due 2011 to 'CCC-' from 'CCC'.

Ratings on Duane Reade reflect:

(1) the company's leveraged capital structure,

(2) thin cash flow protection measures, and

(3) narrow geographic focus.

Duane Reade is one of the largest drug chains in the New York metropolitan area; more than half of its 249 stores are in Manhattan.

Duane Reade's operating performance has been declining since the fourth quarter of 2001. The company's operating margin fell to 11.8% in 2004, from 12.5% the previous year and a high of 16.4% in 2000. The margin dropped to 9.9% in the first quarter of 2005 from 12.4% in the prior-year quarter.

The margin erosion is attributable to:

(1) weak sales of high-margin front-end merchandise,

(2) increased labor expense,

(3) an increased portion of low-margin pharmacy sales, and

(4) greater competition from national drugstore chains.

Margins are expected to remain under pressure in the near term, as Duane Reade's front-end merchandising strategy appears to be struggling.

Cash flow protection measures are thin, with EBITDA coverage of interest at 1.3x in the 12 months ended March 29, 2005. Because of the sharp drops in EBITDA, leverage has increased dramatically. Total debt to EBITDA was 10.5x in the 12 months ended March 29, 2005.

ENERGEM RESOURCES: Filing Tardy Financial Statements by May 20--------------------------------------------------------------Energem Resources Inc. was not able to file its audited financial statements for the fiscal year ended November 30, 2004 or its interim financial statements for the first quarter ended Feb. 28, 2005 by the May 10, 2005, as contemplated in the Company's 1st Default Status Report. The Company's auditor continues to be in the process of completing the reviews and related report for the Annual Financial Statements. Once the Annual Financial Statements are finalized, the First Quarter Financial Statements can be finalized. The Company now expects to file both the Annual Financial Statements and the First Quarter Financial Statements by May 20, 2005.

The Company advises that there is no actual or anticipated defaultof a financial statement filing requirement subsequent to that disclosed in the Notice of Default.

Issuer Cease Trade Order

As reported in the Troubled Company Reporter on Apr. 27, 2005, thesecurities commission or regulators may impose an issuer ceasetrade order if the Annual Financial Statements are not filed byJune 19, 2005, and the First Quarter Statements are not filed byJune 14, 2005. An issuer CTO may be imposed sooner if the Companyfails to file its Default Status Reports on time.

The Company intends to satisfy the provisions of the defaultstatus reports of (the) CSA Staff Notice 57-301 as long as itremains in default of the financial statement filing requirementsby issuing, during the period of default, a Default Status Reporton a bi-weekly basis.

The Company advises that it is not subject to any insolvencyproceeding.

The Company advises that there is no other material informationconcerning the affairs of the Company that has not been generallydisclosed.

Energem Resources Inc. is a natural resources company listed onthe Toronto Stock Exchange with projects in the energy and miningsectors in a number of African countries. The Company is committedto developing niche high margin natural resource projects inAfrica and is currently active in 16 countries. Ventures encompassdiamond mining and mineral exploration, mid- and up stream oil andgas projects, energy and mining related manufacturing, trading andtrade finance businesses operating off a common logistics platformand infrastructure. The Company has offices and/or logistics andsupport infrastructure in Johannesburg, London, Beijing and anumber of African countries.

Each of the four EMBS transactions are collateralized by fixed, floating, and adjustable rate mortgage-backed securities, collateralized mortgage obligations, asset-backed securities, U.S. government securities, and other investment vehicles. Massachusetts Mutual Investment Management serves as the investment manager to each of the transactions.

EMBS I has continued to exhibit strong performance, and currently has a net asset value above 120%. This is in compliance with the performance trigger of 90.5%, and represents the likelihood that the deal will be able to return the full principal balance to each class of notes.

EMBS II currently has a NAV of approximately 98.8%, which is in compliance with its performance trigger of 90.5%. However, because the NAV is below 100%, it is likely that the certificates will incur a partial loss of approximately 8% of the $30,000,000 outstanding balance when the deal matures on May 25, 2005. Fitch has determined that the current rating assigned to the certificates ('B-') appropriately reflects the likelihood of this loss to the noteholders.

EMBS III has exhibited strong performance to date, as shown by its current NAV of approximately 107%. This NAV is currently in compliance with its performance trigger of 90.5%, and represents the likelihood that the deal will be able to return the full principal balance to each class of notes.

EMBS IV currently has a NAV of 98.4%, which is in compliance with its performance trigger of 90.5%. Although the NAV is currently below 100%, representing a potential loss of principal, EMBS IV does not mature until 2010 and there is no current threat to the noteholders.

As a result of this analysis, Fitch has determined that the current ratings assigned to the above-referenced notes still reflect the current risk to noteholders.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings Web site at http://www.fitchratings.com/

ENRON CORP: Files Annual Report for 2004 Under PUHCA----------------------------------------------------On May 2, 2005, Enron Corp. filed with the Securities andExchange Commission an annual report on Form-U5S under the PublicUtility Holding Company Act of 1935. The Report providesinformation about Enron and its subsidiaries as of, and for, thecalendar year ending December 31, 2004.

Prior to the Petition Date, Enron had in excess of 2,500subsidiaries. With their Chapter 11 Plan premised on liquidationof Enron and its subsidiaries, many of the Reorganized Debtors'assets have been sold, wound down, or closed. By December 31,2004, Enron had reduced the prepetition size of the Enron groupto around 1,140 subsidiaries.

Robert H. Walls, Jr., Enron executive vice president and generalcounsel, relates that Enron will continue to dissolve, sell, orliquidate its remaining entities in accordance with the Plan, andwill continue to exist only as long as necessary to resolveclaims, sell assets, and manage the litigation of the estate.

The information in the Annual Report, Mr. Walls says, was notprepared for investment purposes, is not audited, is subject tofurther review and potential adjustment and may not be indicativeof the financial condition or operating results of Enron or itssubsidiaries.

Enron was not able to include a consolidated financial statementin the annual report. "The production of consolidating financialstatements . . . would require a significantly larger accountingstaff than Enron currently has available, an external auditor,and a substantial investment in time, training and financialresources," Mr. Walls explains.

Mr. Walls believes it to be "highly unlikely" for Enron to findan auditing firm willing to undertake the consolidation of thefinancial reports. Furthermore, Mr. Walls adds, "undertakingthis task would be contrary to the interests of Enron's creditorsdue to the significant costs that would be imposed on theReorganized Debtors' estate and the negligible value of auditedfinancial statements as a tool for managing the administration ofthe estate under the Plan."

Enron no longer has securities listed for trading on a securitiesexchange. The only Enron subsidiary with listed securities isPortland General Electric.

Headquartered in Houston, Texas, Enron Corporation is in the midstof restructuring various businesses for distribution as ongoingcompanies to its creditors and liquidating its remainingoperations. Before the company agreed to be acquired, controversyover accounting procedures had caused Enron's stock price andcredit rating to drop sharply.

ENRON CORP: Settles Claim Dispute with Renaissance Entities-----------------------------------------------------------Prior to the Petition Date, MIECO, Inc., entered into separateagreements with Enron Power Marketing, Inc., and Enron NorthAmerica Corp. for the sale of commodities and the exchange ofcash payments based on the movement of the commodities' prices orof indices relating to these commodities.

Enron Corp. executed credit support guaranties for EPMI of up to$30,000,000 and ENA of up to $15,000,000 for their obligationsunder the agreements.

At the pendency of the Debtors' bankruptcy cases, MIECO filedfour proofs of claim arising from the Debtors' liabilities underthe agreements and the guaranties:

a. Claim No. 8535 will be allowed as a prepetition, general unsecured claim for $2,960,244 against ENA;

b. Claim No. 8534 will be allowed as a Class 185 claim for $1,110,092;

c. Claim No. 8536 will be allowed as a prepetition, general unsecured claim against EPMI for $14,089,200;

d. Claim No. 8537 will be allowed as a prepetition, general unsecured claim in Class 185 for $14,089,200; and

e. The Guaranty Avoidance Action will be dismissed, with prejudice and without costs to any party.

Headquartered in Houston, Texas, Enron Corporation is in the midstof restructuring various businesses for distribution as ongoingcompanies to its creditors and liquidating its remainingoperations. Before the company agreed to be acquired, controversyover accounting procedures had caused Enron's stock price andcredit rating to drop sharply.

ENRON CORP: Lockheed to Pay $1.3 Million in Settlement Pact-----------------------------------------------------------Prior to the Petition Date, Enron Energy Services Operations,Inc., and Lockheed Martin Corporation entered into a MasterCorporate Agreement. EESO agreed to pay to applicable utilitycompanies certain of Lockheed's obligations relating toelectrical power and natural gas that the utility companiessupplied to Lockheed.

In April 2003, EESO advised Lockheed that Lockheed owed theseamounts to EESO under the Agreement:

-- $859,967 in payments to or for the benefit of Lockheed, made within 90 days prior to the Petition Date;

-- $1,445,512 in accounts receivable plus interest; and

-- $6,327,493 as termination payment under the Agreement.

Lockheed disputes the Debtors' assertions.

Following extensive negotiations, the Debtors and Lockheed havenegotiated a Settlement Agreement pursuant to which:

a. Lockheed will pay the Debtors $1,305,406; and

b. the Debtors, Lockheed and its affiliates will exchange mutual general releases.

At the Debtors' request, the Court approves the SettlementAgreement.

Headquartered in Houston, Texas, Enron Corporation is in the midstof restructuring various businesses for distribution as ongoingcompanies to its creditors and liquidating its remainingoperations. Before the company agreed to be acquired, controversyover accounting procedures had caused Enron's stock price andcredit rating to drop sharply.

FIDELITY NAT'L: Spin-Off Cues Fitch to Affirm BB- Credit Rating---------------------------------------------------------------Fitch Ratings has placed the 'A-' insurer financial strength ratings of the title insurance underwriting subsidiaries of Fidelity National Financial, Inc., and the 'BBB-' long-term issuer rating of FNF on Rating Watch Negative. In addition, the 'BB-' rating on the senior secured credit facility of FNF's subsidiary, Fidelity National Information Services, is affirmed.

The rating action follows the announcement that FNF plans to partially spin-off its title operations in the third quarter of 2005. In addition, the new title insurance holding company will borrow $500 million from a new bank facility and pay a special dividend to FNF. The Rating Watch primarily reflects the increased financial leverage at both the title insurance operations and in FNF overall.

Today's announced restructuring follows the recent recapitalization of both FNF and FIS, in which FIS raised capital through a bank facility and paid a large dividend to FNF. In addition, 25% of FIS was sold to two institutional investors. The debt at FIS is not guaranteed by FNF and, thus, is primarily rated on its own strengths and weaknesses.

Fitch views FNF's ratings and the title operations segregated from information services to determine FNF-only leverage and coverage that is supportive of the current ratings. There is also consideration for overall financial leverage. While Fitch believes the partial spin-off of the title operations does not change this view, the concern primarily resides with the non-FIS entities increasing willingness to leverage the consolidated balance sheet.

Fitch plans to review this transaction with management in the near term. Resolution of the Rating Watch will be based on management's plans regarding financial leverage on a consolidated basis and title insurance-only basis. If the new holding company is determined to maintain financial leverage in the mid-20s or lower, assuming no material change in overall financial leverage, then the ratings will likely be affirmed at the current level.

Fidelity National Title Insurance Co.Fidelity National Title Insurance Co. of NYAlamo Title Insurance Co. of TXNations Title Insurance of NY Chicago Title Insurance Co.Chicago Title Insurance Co. of ORSecurity Union Title Insurance Co.Ticor Title Insurance Co.

FLAG RESOURCES: Filing First Quarter Financial Reports by May 31----------------------------------------------------------------Flag Resources (1985) Limited (TSX Venture Exchange: FGR.A) provides a Default Status Report pursuant to the terms of an Interim Management Cease Trade Order issued by the securities regulatory authorities in Alberta and Quebec on May 6, 2005. As stated in the Notice of Default filed by the Company on May 11, 2005, the order was requested by the Company in accordance with CSA Staff Notice 57-301 pending the filing of their financial statements for the year ended December 31, 2004. The Company anticipates filing its financial statements for the first quarter of 2005 on or before May 31, 2005.

Pursuant to CSA Staff Notice 57-301, the Company confirms that:

(i) there has been no material change to the information set out in its initial Notice of Default,

(ii) there has been no failure by the Company to fulfill its stated intentions in its Notice of Default or any Default Status Report,

(iii) there has been no actual or anticipated default of a financial statement filing requirement subsequent to the Notice of Default, and

(iv) there is no other material information concerning the affairs of the Company.

FRANK'S NURSERY: Court Sets Plan Confirmation Hearing for June 14-----------------------------------------------------------------The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York approved the Second Amended Disclosure Statement explaining the Second Amended Plan of Reorganization filed by Frank's Nursery & Crafts, Inc. The Debtor is now authorized to solicit acceptances to its plan.

The Court set a plan confirmation hearing on June 14, 2005, at 3:00 p.m. All ballots and objections are due not later than 4:00 p.m. on June 3, 2005.

Headquartered in Troy, Michigan, Frank's Nursery & Crafts, Inc., operated the largest chain (as measured by sales) in the United States of specialty retail stores devoted to the sale of lawn and garden products. Frank's Nursery and its parent company, FNC Holdings, Inc., each filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court for the District of Maryland on Feb. 19, 2001. The companies emerged under a confirmed chapter 11 plan in May 2002. Frank's Nursery filed another chapter 11 petition on September 8, 2004 (Bankr. S.D.N.Y. Case No. 04-15826). Allan B. Hyman, Esq., at Proskauer Rose LLP, represents the Debtor. In the Company's second bankruptcy filing, it listed $123,829,000 in total assets and $140,460,000 in total debts.

GLASS GROUP: Creditors Must File Proofs of Claim by July 11----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware setJuly 11, 2005, as the last day for all creditors owed money byThe Glass Group Inc., on account of claims arising prior to Feb. 28, 2005, to file their proofs of claim.

Creditors must file their written proofs of claim on or before theJuly 11 Claims Bar Date, and those forms must be delivered to the Debtors' claims agent:

GLASS GROUP: SSG Capital Approved as Exclusive Investment Bankers----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave The Glass Group Inc. permission to employ SSG Capital Advisors, L.P., as its exclusive investment bankers, nunc pro tunc to Feb. 28, 2005.

The Debtor chose SSG Capital as its investment banker because of the Firm's extensive experience in assisting and advising financially distressed companies under chapter 11 bankruptcy proceedings.

SSG Capital will:

a) assist the Debtor in obtaining post-petition financing to meet its financing objectives, and assist in any potential sale of some or all of the Debtor's business and assets;

b) provide the Debtor with restructuring advisory services in connection with its financial restructuring under chapter 11; and

c) provide all other investment banking and restructuring advisory services to the Debtor that are necessary and appropriate in its chapter 11 case.

J. Scott Victor, a Managing Director at SSG Capital, discloses that the Firm will be paid:

a) a Monthly Fee of $35,000 and a Financing Fee equal to 2% of the total financing the Debtor will receive from a completed financial transaction, including DIP financing and exit financing, during the Debtor's period of engagement of SSG Capital;

b) an Advisory Fee equal to 1.5% of the Total Consideration paid to the Debtor in the event it successfully completes a sale of its business unit, division, subsidiary or any other asset; and

c) a Restructuring Fee equal to $750,000 minus the $35,000 Monthly Fee in the event there is no completed sale transaction for the Debtor during its period of engagement of SSG Capital.

SSG Capital assures the Court that it does not represent any interest materially adverse to the Debtor or its estate.

The affirmations are due to the stable performance of the collateral. As of the May 10, 2005, distribution date, the collateral balance has been reduced by 2.1%, to $408.7 million from $418 million at issuance, due to amortization of the loan. The loan is secured by 2,667 wireless communication sites owned, leased, or managed by the borrower.

As part of its review, Fitch analyzed the management report provided by the servicer, Midland Loan Services. As of year-end 2004, aggregate annualized run rate revenue increased to $165.8 million, a 2.3% increase from issuance. Over the same time period, the Fitch adjusted net cash flow increased 17.1% since issuance. This increase is due to the growth in revenue, especially telephony revenue, and the disposition of underperforming sites, which resulted in an expense savings. The corresponding Fitch stressed debt service coverage ratio was 1.33 times compared to 1.11x at issuance.

The tenant type concentration has improved: total revenues contributed by telephony tenants has increased to 43.3% compared to 38.6% at issuance.

GOLDEN BRIAR: Filing 1st Quarter Financial Statements by May 31---------------------------------------------------------------Golden Briar Mines Limited (TSX Venture Exchange: GLB) provides a Default Status Report pursuant to the terms of an Interim Management Cease Trade Order issued by the securities regulatory authorities in Alberta and Quebec on May 6, 2005. As stated in the Notice of Default filed by the Company on May 11, 2005, the order was requested by the Company in accordance with CSA Staff Notice 57-301 pending the filing of their financial statements for the year ended December 31, 2004. The Company anticipates filings its financial statements for the first quarter of 2005 on or before May 31, 2005.

Pursuant to CSA Staff Notice 57-301, the Company confirms that:

(i) there has been no material change to the information set out in its initial Notice of Default,

(ii) there has been no failure by the Company to fulfill its stated intentions in its Notice of Default or any Default Status Report,

(iii) there has been no actual or anticipated default of a financial statement filing requirement subsequent to the Notice of Default, and

(iv) there is no other material information concerning the affairs of the Company.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

H&E EQUIPMENT: March 31 Balance Sheet Upside-Down by $39.4 Million------------------------------------------------------------------H&E Equipment Services L.L.C. reported that first quarter revenues increased $16.6 million, or 14.8%, from the first quarter of 2004, first quarter gross profit increased $12.0 million, or 48.4%, from the first quarter of 2004, first quarter netincome increased $10.0 million, or 111.5%, from the first quarter of 2004 and first quarter earnings before interest, taxes, depreciation and amortization (EBITDA) increased $10.4 million, or 74.0%.

John Engquist, President and Chief Executive Officer, said, "Our strong performance in the first quarter reflects significant improvement in revenue and gross profit in each of our business segments. With continued improvement in non-residential construction, the primary driver of our business, and our belief that we will continue to see rental rates improve throughout the remainder of the year, 2005 should be a very strong year for our company."

Results of Operations

First quarter revenues were $128.6 million compared to $112.0 million for the first quarter of 2004. First quarter 2005 income from operations was $11.0 million compared to $0.9 million last year, an increase of $10.1 million. The first quarter of 2005 net income was $1.0 million compared to $9.0 million net loss for the first quarter of 2004. EBITDA for the first quarter increased $10.4 million, or 74.0%, to $24.4 million from $14.0 million for the first quarter of 2004.

First quarter equipment rental revenues were $40.6 million compared to $35.6 million for the first quarter of 2004, reflecting an increase of $5.0 million, or 14.0%. The overall increase was primarily due to a $4.5 million increase in aerial work platform equipment rental revenue. At the end of the first quarter of 2005, the original acquisition cost of the rental fleet was $459.8 million, down $13.6 million from $473.4 million at the end of the first quarter of 2004. For the first quarter of 2005, dollar utilization increased to 35.1% from 29.6% for the first quarter of 2004.

First quarter new equipment sales were $30.3 million compared to$25.3 million for the first quarter of 2004, reflecting an increase of $5.0 million, or 19.8%. First quarter used equipment sales were $25.6 million, representing a $2.3 million, or 9.9%, increase from $23.3 million for the first quarter of 2004. New equipment sales increased in aerial work platforms, earthmoving, lift trucks and other new equipment while new crane sales decreased. Used equipment sales increased in cranes, aerial work platforms and earthmoving while lift trucks and other used equipment sales declined in comparison to the first quarter of 2004. Parts sales and service revenues for the first quarter of 2005, collectively, were $25.6 million, representing a $3.1 million, or 13.6%, increase compared to $22.5 million for the first quarter of 2004.

Gross profit for the first quarter of 2005 was $36.8 million compared to $24.8 million for the first quarter of 2004, reflecting an increase of $12.0 million, or 48.4%. First quarter gross profit margin increased to 28.6% from 22.1% for the first quarter of 2004. Gross profit margin improved for equipment rentals, new, used, parts sales and service revenues.

First quarter gross profit from equipment rentals was $17.0 million compared to $9.8 million for the same time period last year, reflecting an increase of $7.2 million, or 73.5%. The increase was primarily a result of $5.0 million more in rental revenues combined with $2.1 million less in depreciation, maintenance expense and other rental costs. New equipment sales gross profit for the first quarter of 2005 increased to $3.8 million from $2.7 million for the first quarter of 2004. Used equipment sales gross profit for the first quarter of 2005 increased to $5.8 million from $4.4 million for the first quarter of 2004. The improvement in both new and used equipment sales gross profit is a result of increasing demand and extended lead times from manufacturers. Gross profit for parts sales and service revenues for the first quarter of 2005 was $10.9 million compared to $9.2 million for the same time period in 2004 and is primarily a result of the mix of parts sold and increased service billing rates.

Selling, general and administrative expenses for the first quarter of 2005 were $25.8 million compared to $24.0 million last year, a $1.8 million, or 7.5%, increase. The increase was primarily related to higher sales commissions, performance incentives, benefits, and outside services such as audit and legal fees. As a percentage of total revenues, selling, general and administrative expenses for the first quarter of this year decreased to 20.1% for the first quarter of this year from 21.4% for the first quarter of last year.

Filing Delay

The Company has delayed reporting its final 2004 financial results. The Company will also delay finalizing results for the first quarter of 2005 and filing of its Form 10-Q until it reports final results for 2004. The delay in filing the Form 10-Q will extend beyond the due date, including the five-day extension period.

About the Company

H&E Equipment Services L.L.C. is one of the largest integrated equipment rental, service and sales companies in the United States of America, with an integrated network of 39 facilities, all of which have full service capabilities, and a workforce that includes a highly-skilled group of service technicians and separate and distinct rental and equipment sales forces. In addition to renting equipment, the Company also sells new and used equipment and provides extensive parts and service support. This integrated model enables the Company to effectively manage key aspects of its rental fleet through reduced equipment acquisition costs, efficient maintenance and profitable disposition of rental equipment. The Company generates a significant portion of its gross profit from parts sales and service revenues.

HALIFAX REGIONAL: Fitch Lowers Series 1998 Bonds to BB+ from BBB------------------------------------------------------------------Fitch downgrades approximately $22.4 million of North Carolina Medical Care Commission's hospital revenue bonds (Halifax Regional Medical Center), series 1998, to 'BB+' from 'BBB-'. This rating action follows a downgrade to 'BBB-' from 'BBB' in March 2004. The Rating Outlook remains Negative.

The downgrade is due to Halifax Regional Medical Center's continued operating losses, which have led to a precipitous decline in HRMC's unrestricted cash position. In fiscal 2004, HRMC posted a negative 6.5% operating margin ($4.4 million loss). HRMC has posted annual losses since fiscal 1999 with an average operating margin of negative 4.4% from fiscal years 1999-2004. Including its foundation, HRMC had 49.5 days cash on hand as of March 31, 2005, a significant decline from 110.4 days at fiscal 2003. During this period, HRMC's cash-to-debt position declined to 28.7% from 68.6%.

The decline in liquidity was due in part to significant contributions (approximately $200,000 per month) to HRMC's defined benefit pension plan since September 2003. Days in accounts receivable has also spiked to 76.2 days at March 31, 2005 from 56.7 days at fiscal 2003. Management attributes the increase in accounts receivable to an information systems conversion and expects a reduction to approximately 65 days by September 2005.

HRMC's operating performance continues to be hindered by limited revenue growth, which reflects HRMC's challenging payor mix that included approximately 58% Medicare and 20% Medicaid in fiscal 2004. Both of these payors are unprofitable. HRMC's expense growth in 2004 was driven by labor and provision for bad debts. In fiscal 2004, bad debt as a percentage of revenues was 11.7%, an increase from 9.8% in 2003, which reflects difficulty with collecting copays and deductibles. HRMC's primary service area exhibits low income levels, a declining population base, and high unemployment rates. However, Fitch notes that the expected entrance of several large employers into the service area could enhance the area's demographic profile.

Primary credit strengths are HRMC's dominant market position, positive inpatient utilization trends, and recent improvement in operating profitability. In its primary service area, HRMC has maintained a dominant market share position of approximately 60%. The nearest acute care facility is Nash General Hospital (11% market share) in Rocky Mount, North Carolina, approximately 35 miles away. HRMC has demonstrated positive inpatient utilization trends in recent years. From 2003-2004, discharges increased 5.2% to 7,775 from 7,389, and this positive trend has continued through six months ended March 31, 2005.

Through six months of fiscal 2005, operating income, excluding the foundation and HRMC's clinics, was $731,000 (1.9% margin), representing an improvement from negative $370,000 for the same period in the prior year, which was supported by a hiring freeze. HRMC has recently identified $3.5 million in additional expense reduction initiatives, including freezing its defined benefit pension plan, which Fitch expects to support the recent operating improvement.

The Rating Outlook is Negative. Despite year-to-date improvement in profitability, Fitch believes that HRMC's challenging payor mix will continue to pressure operations, including potential cutbacks in Medicaid reimbursement in July 2005. Furthermore, Fitch believes that HRMC's weakened liquidity position allows limited financial flexibility going forward. Deterioration of HRMC's current liquidity position or operations could place additional downward pressure on the credit rating.

HRMC is a 206 licensed-bed community medical center (169 operated beds) providing primary and secondary care services. The medical center is located in Roanoke Rapids, approximately 75 miles northeast of Raleigh. In fiscal 2004, HRMC had $67.7 million in total operating revenue. Disclosure to Fitch has been adequate with quarterly disclosure, although only audited annual disclosure is required in the bond documents. HRMC provides disclosure upon request to other third parties. Fitch notes that quarterly disclosure includes a balance sheet and income statements; however, a statement of cash flows and management discussion and analysis is not provided.

"We now have the court's approval of our reorganization plan," Joshua Gotbaum, Hawaiian Airlines' Chapter 11 Trustee, said. "Hawaiian will exit bankruptcy on June 1, a better, stronger airline. Many have contributed to this accomplishment in many ways and everyone associated with Hawaiian should be very proud."

Mr. Gotbaum developed the joint plan with Hawaiian's Official Committee of Unsecured Creditors and Ranch Capital LLC, the controlling shareholder of Hawaiian Holdings, Hawaiian's parent company. The plan's highlights are:

-- creditors receive 100% of the value of their claims, most of them in cash;

-- existing stockholders keep their shares, whose value has risen during the bankruptcy; and

-- employees have new negotiated contracts, which, for the first time, have pay and benefits comparable to or better than those at Hawaiian's competitors.

As reported in the Troubled Company Reporter on March 14,2005, the Court approved the Company's plan of reorganization on March 10, 2005, but will emerge from bankruptcy after its two remaining labor contracts are ratified and a formal order is entered by the court.

The Hawaiian bankruptcy has involved many twists and turns overthe past two years. After the airline filed in March 2003,creditors successfully petitioned the bankruptcy court to replacethe airline's CEO and controlling shareholder with a trustee.

Under a trustee, multiple reorganization plans can be filed, andseveral plans were, including one by Boeing, a major creditor, andanother by one of Hawaiian's own pilots. The former plan waswithdrawn last fall and the latter plan was withdrawn on Thursdayafter its financing source was arrested by the FBI for fraud andbribery.

Mr. Gotbaum, working with Hawaiian's creditors committee,established a competitive process to solicit investors for theirown plan. In August, they selected and jointly proposed a planwith investors led by Ranch Capital, who had purchased acontrolling interest in Hawaiian's parent company, HawaiianHoldings, Inc. (Amex: HA).

Hawaiian Airlines, Inc. -- http://www.HawaiianAir.com/-- is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Sincethe appointment of a bankruptcy trustee in May 2003, HawaiianHoldings has had no responsibility for the management of HawaiianAirlines and has had limited access to information concerning theairline.

HEILIG-MEYERS: RoomStore Exits Bankruptcy on Its Own----------------------------------------------------The Honorable Douglas O. Tice, Jr., of the U.S. Bankruptcy Court for the Eastern District of Virginia confirmed on May 17, 2005, the Amended and Restated Joint Plan of Reorganization proposed by HMY RoomStore, Inc., a wholly owned subsidiary of Heilig-Meyers Company.

"It has been a long time coming, but it is certainly worth the wait," Curtis C. Kimbrell, president and chief executive officer of The RoomStore since May 2001 told Gregory Gilligan at Times-Dispatch. "This gives us an opportunity to operate without having one hand tied behind our back. This opens up a lot of doors for us that have been closed."

Under the terms of the Plan, RoomStore will emerge as areorganized business enterprise and the unsecured creditors ofRoomStore will receive common stock in Reorganized RoomStore insatisfaction of their claims against RoomStore.

Reorganized RoomStore will issue 9.8 million shares of new RoomStore common stock to an unsecured claims reserve for the benefit of allowed unsecured claims and affiliated debtor claim. Heilig-Meyers Company, the parent of RoomStore, is the single largest creditor of RoomStore and will receive approximately 67% of the new common stock of Reorganized RoomStore. Reorganized RoomStore will continue to operate 60 stores under the RoomStore name.

RoomStore's parent company and all its other affiliates will liquidate.

RoomStore offers a wide selection of professionally coordinatedhome furnishings in complete room packages at value-orientedprices. RoomStore operates 65 stores located in Pennsylvania,Maryland, Virginia, North Carolina, South Carolina and Texas.

Heilig-Meyers Company filed for chapter 11 protection onAug. 16, 2000 (Bankr. E.D. Va. Case No. 00-34533), reporting$1.3 billion in assets and $839 million in liabilities. When theCompany filed for bankruptcy protection it operated hundreds ofretail stores in more than half of the 50 states. In April 2001,the company shut down its Heilig-Meyers business format. InJune 2001, the Debtors sold its Homemakers chain to Rhodes, Inc.GOB sales have been concluded and the Debtors are liquidatingtheir remaining Heilig-Meyers assets. The Debtors are working toeffect a restructuring of their RoomStore business operations with the expectation of bringing that business out of bankruptcy as a reorganized company. Bruce H. Matson, Esq., Troy Savenko, Esq., and Katherine Macaulay Mueller, Esq., at LeClair Ryan, P.C., in Richmond, Va., represent the Debtors.

INTERSTATE BAKERIES: Court Okays Judge Federman as Mediator-----------------------------------------------------------The U.S. Bankruptcy Court for the Western District of Missouri authorizes Judge Arthur B. Federman to administer the mediation and arbitration process in Interstate Bakeries Corporation and its debtor-affiliates' chapter 11 cases in accordance with the Claims Resolution Procedures. Judge Federman may appoint individual mediators or arbitrators, where applicable, in his sole discretion, with the input and advice of the parties to the mediation or arbitration. For claims with reserve amounts in excess of $100,000, there will be a preference for mediators or arbitrators in and around Kansas City, Missouri. In addition, Judge Federman may serve as a mediator or arbitrator in certain larger or more complex mediations or arbitrations, as requested by the Debtors.

Pursuant to the Claims Resolution Procedures:

(i) the parties will engage in mediations or arbitrations only upon the mutual consent of the parties; and

(ii) the cost of mediations or arbitrations will be shared equally by the parties.

For administrative purposes, the Court directs the Debtors to pay all of Judge Federman's fees and expenses incurred in his capacity as Mediator within 10 days after submission of the bill to the Debtors.

The Tort Claimant will pay its share of fees and expenses directly to the Debtors. Reimbursement of Judge Federman's fees and expenses would be on the same basis that judges are reimbursed for government travel, which includes actual expenses for hotel, travel and postage, plus a per diem allowance for food. Judge Federman will not be required to submit any application for allowance of expenses.

All of the expenses incurred by Judge Federman in his capacity as Mediator that otherwise would be allowed for a judge's travel expenses, are deemed reasonable, and do not require further Court approval.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

INTERSTATE BAKERIES: Can Walk Away from Six Real Estate Leases--------------------------------------------------------------The U.S. Bankruptcy Court for the Western District of Missouri gave Interstate Bakeries Corporation and its debtor-affiliates permission to reject Real Property Leases for six locations, effective as of the Rejection Date applicable to each Real Property Lease, to reduce postpetition administrative costs.

The Debtors intend to reject five Real Property Leases effectiveas of April 20, 2005:

The Debtors also want to reject an October 19, 1988, RealProperty Lease with respect to a property owned by ChildersRealty at 4100 First Avenue in Nitro, West Virginia, effective asof March 31, 2005.

According to J. Eric Ivester, Esq., at Skadden Arps Slate Meagher& Flom LLP, in Chicago, Illinois, the resultant savings from therejection of the Real Property Leases will favorably affect theDebtors' cash flow and assist the Debtors in managing theirfuture operations.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

INTERSTATE BAKERIES: Closing New Bedford, Massachusetts Bakery --------------------------------------------------------------Interstate Bakeries Corporation (OTC: IBCIQ.PK) plans to consolidate operations in its Northeast Profit Center (PC) by closing its bakery in New Bedford, Massachusetts, and consolidating production, routes, depots and thrift stores throughout the Northeast where it maintains regional facilities.

The decision is made as part of the Company's continuing efforts to address its revenue declines and high-cost structure. The Company expects to complete the consolidation of the Northeast PC by mid-August, subject to the U.S. Bankruptcy Court for the Western District of Missouri's approval. The consolidation is expected to affect approximately 1400 workers.

"[Yester]day's decision is not a reflection on the hard work and efforts of our employees, but is based on what is best for the overall health of the Company. Our end goal is to greatly reduce the operating weaknesses and redundancies that continue to hurt our business -- to save our company and as many jobs as possible. We will make every reasonable effort to make this transition as smooth as possible for our employees," said Tony Alvarez II, chief executive of IBC and co-founder and co-chief executive of Alvarez & Marsal, the global corporate advisory and turnaround management services firm.

The Company's preliminary estimate of charges to be incurred in connection with the Northeast PC consolidation is approximately $17 million, including approximately $7 million of severance charges, approximately $7 million of asset impairment charges and approximately $3 million in other charges. IBC further estimates that approximately $9 million of such costs will result in future cash expenditures. In addition, the Company intends to spend approximately $4.5 million in capital expenditures and accrued expenses to effect the consolidation. In addition to the asset impairment charges discussed above, IBC also expects to recognize charges to intangible assets related to trademarks and tradenames that will be impaired as a result of the consolidation of operations disclosed yesterday. IBC is not able to provide an estimate of these charges currently.

As previously disclosed, IBC currently contributes to more than 40 multi-employer pension plans as required under various collective bargaining agreements, many of which are underfunded. The portion of a plan's underfunding allocable to an employer deemed to be totally or partially withdrawing from the plan as the result of downsizing, job transfers or otherwise is referred to as "withdrawal liability." Certain of the plans have filed proofs of claim in IBC's bankruptcy case alleging that partial withdrawals have already occurred. IBC disputes these claims; however, there is a risk that the consolidation announced today could significantly increase the amount of the liability to IBC should a partial withdrawal from the multi-employer pension plans covering the Northeast PC employees be found to have occurred. IBC is conducting the Northeast PC consolidation in a manner that it believes will not constitute a total or partial withdrawal from the relevant multi-employer pension plans. Nevertheless, due to the complex nature of such a determination, no assurance can be given that withdrawal claims based upon IBC's prior action or resulting from this consolidation or future consolidations will not result in significant liabilities for IBC. Should a partial withdrawal be found to have occurred, the amount of any partial withdrawal liability arising from the underfunded multi-employer pension plans to which IBC contributes would likely be material and could adversely affect our financial condition and, as a general unsecured claim, any potential recovery to our constituencies.

Recently, the Company disclosed the closing of its bakery in Miami, Florida, and Charlotte, North Carolina, and the consolidation of routes, depots and thrift stores in its Florida and Mid-Atlantic PCs.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

KAISER ALUMINUM: Partially Settles Dispute Over Thorpe Claims-------------------------------------------------------------Kaiser Aluminum Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow the 17 identical proofs of claim filed by J.T. Thorpe, Inc.

Each of the Thorpe Claims, designated as Claim Nos. 7222 through 7238 in the Debtors' claims register, is unliquidated, contingent, and asserts an alleged right to reimbursement or contribution, based on Thorpe's status as co-defendant in an asbestos-related litigation, from the Debtors.

The Debtors argue that Kaiser Aluminum & Chemical Corporation is the only debtor with any liability with respect to asbestos-related claims. Therefore, there is no basis whatsoever for the Thorpe Claims. The Debtors want the Claims disallowed under Section 502(b)(1) of the Bankruptcy Code because they are unenforceable against the other Debtors. The Debtors assert that Thorpe doesn't have a right to payment.

The Debtors also cite that Section 502(e)(1)(B) mandates disallowance of all of the Thorpe Claims. Section 502(e)(1)(B) provides that:

"the court shall disallow any claim for reimbursement or contribution of an entity that is liable with the debtor on . . . the claim of a creditor, to the extent that . . . such claim for reimbursement or contribution is contingent as of the time of allowance or disallowance of such claim for reimbursement or contribution."

Disallowance of contingent contribution claims under Section 502(e)(1)(B) eliminates the possibility that a debtor will make payments on both the underlying claims of a third party and a co-defendant's claim for reimbursement arising from that third party's claim.

Thorpe Objects

J.T. Thorpe, Inc., a dissolved California corporation, and J.T. Thorpe, Inc., asks the Court to deny the Debtors' request or, in the alternative:

(i) continue the deadline and hearing dates, or (ii) allow the Thorpe Claims.

Thorpe and Dissolved Thorpe, together with Thorpe Technologies,Inc. and Thorpe Holding Company are each Chapter 11 debtors-in-possession in bankruptcy cases pending in the United States Bankruptcy Court for the Central District of California.

To Thorpe's knowledge, neither Kaiser Aluminum Corporation nor Kaiser Aluminum & Chemical Corporation has filed a disclosure statement outlining its liability for asbestos-related personal injury claims. In light of this, as well as the stage of Thorpe's bankruptcy cases in which a confirmation hearing will be held this July, Thorpe asserts that it is unnecessary and a waste of both judicial resources and the resources of each of the Kaiser Debtors' and Thorpe's bankruptcy estates to require Thorpe's claims to be resolved at this time.

Thorpe notes that the Kaiser Debtors have admitted that KACC has liability for asbestos-related injury claims due to its sale of products containing asbestos. From at least 1970 until the early 1980s, Kaiser Refractories was the largest refractory supplier to Dissolved Thorpe, which purchased and used products containing asbestos like Vee Block and Vee Block mix. A significant number of the jobs performed by Dissolved Thorpe during this time used products purchased from Kaiser Refractories.

Beginning in 1987, Thorpe has been the target of numerous asbestos-related personal injury lawsuits claiming damages of at least $100,000,000. From 1987 to 2001, Thorpe's insurers have paid asbestos-related claims in the amount of at least $14,000,000.

Thorpe asserts that its claims are not contingent as to the amounts paid by its insurers. "Disallowance of its claims on this basis is neither warranted nor appropriate," Joseph H. Huston, Jr., Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, argues.

In addition to those asbestos-related claims which have already been paid, Mr. Huston says, further contribution claims are likely to become fixed during the Kaiser Debtors' bankruptcy cases for which Thorpe will be entitled to reimbursement or contribution.

Thorpe submits that it is an inefficient use of judicial resources to deny a portion of its contribution claims now and then require them to be re-filed following confirmation of the Thorpe Entities' joint Plan.

Debtors Respond

The Debtors argue that there is no reason to continue their request as to the Thorpe Claims. KACC is the only Debtor that produced or sold asbestos-containing products, the Debtors assert. Accordingly, the Debtors contend, there can be no basis whatsoever for the Thorpe Claims against them other than KACC.

The Debtors tell the Court that there is no ambiguity with respect to Kaiser Refractories, which is a former d/b/a name for KACC. According to the Debtors, Thorpe should not be confused on this point because the bar date notice for the 2002 Debtors lists Kaiser Refractories as a former d/b/a name for KACC.

Although the Debtors do not oppose a continuance of their request with respect to the Thorpe Claim against KACC, the Debtors do not believe that the claim against KACC has any merit either. "While the Debtors acknowledge that KACC might potentially be liable, and that Thorpe could also be liable, on certain claims asserted by third parties in respect of asbestos-related liability, the Thorpe Claim against KACC should be disallowed for several reasons," Kimberly D. Newmarch, Esq., at Richards Layton & Finger, in Wilmington, Delaware, says.

Ms. Newmarch contends that:

-- Dissolved Thorpe has failed to demonstrate the KACC supplied it with any asbestos-containing products that caused injury to any person, making it inconceivable that KACC could be potentially liable for at least $100,000,000 as asserted by Thorpe.

-- Thorpe does not even allege, let alone prove, that the amounts paid by its insurers were actually paid in satisfaction of KACC's liability to the underlying asbestos plaintiff or with respect to liability for injury caused by KACC's products, and Thorpe has failed to allege that it in fact satisfied any KACC liability with those payments. Given the lack of documentation and evidence contained in Thorpe's pleadings, it is very unlikely that the $14,000,000 relates to KACC's liability, let alone the $100,000,000 that Thorpe claims is its total exposure.

-- Thorpe has failed to demonstrate that it has satisfied any of the elements necessary to establish a valid claim against KACC for contribution under applicable law, including obtaining a release for KACC.

Thus, the Debtors ask the Court to:

(a) disallow and expunge the Thorpe Claims against all Debtors but KACC, pursuant to Section 502 of the Bankruptcy Code; and

(b) continue the Motion with respect to the Thorpe Claim against KACC to August 29, 2005, at 1:30 p.m. and set August 1, 2005, as the deadline for Thorpe to file supplemental objections to the Motion.

Parties Stipulate

In a Court-approved stipulation, the Debtors and Thorpe agree to resolve the issues relating to the 17 identical proofs of claim pursuant to these terms:

(b) The Debtors' request with respect to each of the remaining Thorpe Claims -- Claim Nos. 7222-7224, 7226-7230, and 7232-7238 -- is continued to the omnibus hearing scheduled for August 29, 2005 at 1:30 p.m.

Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts.(Kaiser Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000)

LEAP WIRELESS: Form 10-Q Filing Delay Cues S&P to Watch Ratings---------------------------------------------------------------Standard & Poor's Ratings Services kept its rating for San Diego, Calif.-based wireless carrier Leap Wireless International Inc. (B-/Watch Neg/--) on CreditWatch with negative implications, where they were placed on April 5, 2005, despite the company's recent filing of its 2004 10-K. The company has not yet filed its 10-Q for the first quarter of 2005, as required under terms of its bank loan. The waiver it previously received for the late filing of its financial statements provides an extension until June 15, 2005, to deliver results for the first quarter of 2005. Assuming the company files its 10-Q by June 15, the ratings are expected to be affirmed. However, a negative outlook may be assigned, to reflect the incremental financial and business risk associated with the funding and build-out of new licenses. The recovery rating of "3" on the $610 million secured bank loan at Cricket Communications Inc. is not on CreditWatch, because it is unlikely to be impaired by the factors that would drive a potential downgrade.

"The company has not yet provided good clarity on its funding plans for build-out and launch of wireless markets covered by FCC spectrum licenses obtained in broadband PCS Auction No. 58 in early 2005," said Standard & Poor's credit analyst Catherine Cosentino.

Leap participated in the auction, and is paying $167 million for these licenses. Alaska Native Broadband 1 LLC also participated in the auction, and won separate licenses totaling $68 million. ANB 1 is a venture between Alaska Native Broadband LLC and Leap's Cricket Communications Inc. Cricket has entered into a management services agreement under which it will provide management services to Alaska Native Broadband 1 License LLC, a subsidiary of ANB 1. Leap also has agreed to lend ANB 1 the cash to finance the acquisition of these licenses. Build-out of all of these licenses and development of the business carries significant start-up risk in a highly competitive industry, and such risk largely tempers benefits derived from added market diversity.

"The outlook revision follows continued stability in KBSA's operating performance, owing to the group's robust planning and monitoring procedures as well as favorable residential market development in France," said Standard & Poor's credit analyst Izabela Listowska. "It also reflects our expectation that the group's financial profile will strengthen again after the recent deterioration triggered by the ?85 million debt and cash-financed purchase of future royalties due to its U.S. parent KB Home (BB+/Stable/--)."

Buoyant residential construction activity continued in France in the fiscal year 2004, ended Nov. 30, and in the first quarter of 2005, ended Feb. 28. KBSA expects housing revenues to increase by 15%-20% over the full fiscal year 2005 and reported a housing backlog of about 10 months at Feb. 28, 2005.

"The rating on KBSA could be raised if credit measures bounce back to higher levels following the negative impact of the recent non-recurrent royalties transaction. This assumes sustained generation of positive free cash flow after dividends and acquisitions, and an overall moderate financial policy," said Ms. Listowska. "A turnaround in the French residential construction market or/and any additional extraordinary payments to shareholders could have a negative impact on the ratings."

LOEWEN GROUP: Gets Court Nod to Settle U.S. Trustee Fees for $9MM-----------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware approved the stipulation between the reorganized Loewen Group International Inc. and its debtor-affiliates and the United States Trustee resolving the dispute over the UST's quarterly fees.

Prior to the effective date of the Debtors' chapter 11 plan, the Debtors operated a cash management and disbursement system for more than 800 of its debtor-affiliates. The Debtors substantially made all of their payments to creditors, employees and other third parties under this system. Since the Petition Date, the Debtors calculated and paid quarterly fees to the Office of the U.S. Trustee on the basis of the actual payments made by each Debtor.

In 2001, the U.S. Trustee contested the Debtors' methodology for calculating the amount of the quarterly payments to be paid. The U.S. Trustee believed that instead of attributing the disbursements for quarterly fees to the actual Debtor that made the payment, it should be attributed to the Debtor on whose behalf a payment was made. The U.S. Trustee contended that under the Debtors' methodology, substantial additional amounts of Quarterly Fees, in excess of $10 million, were due and owing.

Accordingly, the U.S. Trustee objected to the confirmation of the Plan on the basis that additional pre-confirmation Quarterly Fees should be paid. The Debtors disputed the U.S. Trustee's position.

Subsequently, the parties entered into initial negotiations to resolve the U.S. Trustee's objection. On December 4, 2001, the parties entered into a stipulation, which the Court approved. The parties agreed to:

(a) the preservation of the Quarterly Fee issues in the U.S Trustee's objection to the confirmation;

(b) the Debtors' issuance of a $4,000,000 irrevocable letter of credit in favor of the U.S. Trustee to secure the payment of the disputed pre-confirmation Quarterly Fees; and

(c) holding their dispute regarding the Quarterly Fees in abeyance.

From June 2002 through March 2004, the Court entered eight orders that closed the Chapter 11 cases of all but nine of the Debtor-affiliates. The Case Closing Orders also specified that the amount of the Letter of Credit be increased to $7,913,750.

Since then, the Debtors have continued to pay the undisputed Quarterly Fees to the U.S. Trustee and the parties engaged in further settlement negotiations.

As a result of those negotiations, the Reorganized Debtors and the U.S. Trustee stipulate and agree that:

(1) The Debtors will deliver to the U.S. Trustee a $9,040,000 check, in compromise, settlement and satisfaction of any and all claims of the Trustee for additional Quarterly Fees accruing for all periods from the second quarter of 1999 through and including the fourth quarter of 2004;

(2) Upon receipt of the payment, both parties will release and discharge each other of all further claims relating to the Quarterly Fees;

(3) Upon receipt of the payment, the U.S. Trustee will release the Letter of Credit and certain related documents, to be held in an escrow account pending the Court's approval of the Stipulation. Upon the Court's approval of the Stipulation, the Reorganized Debtors may take necessary actions to cancel the Letter of Credit in its entirety. The U.S. Trustee will not seek to draw any amounts under the Letter of Credit after the execution of the Stipulation;

(4) The Reorganized Debtors will comply with applicable law with respect to Quarterly Fee obligations accruing in the first quarter of 2005 and the periods thereafter; and

(5) If the Court disapproves the Stipulation, the U.S. Trustee is required to disgorge the amount of the payment to the Reorganized Debtors, the Reorganized Debtors are required to return the Letter of Credit to the U.S. Trustee, and the economic terms of the settlement will be of no force or effect.

Formerly The Loewen Group International Inc., Alderwoods Group isNorth America's #2 funeral services company. Alderwoods Groupowns or operates about 750 funeral homes and some 170 cemeteriesin the US and Canada. The firm's funeral services include casketsales, remains collection, death registration, embalming,transportation, and the use of funeral home facilities. TheDebtors filed for chapter 11 protection in the United States andCCAA protection in Canada on June 1, 1999 after the Debtors failedto make debt payments after its aggressive acquisition phase. Loewen became Alderwoods Group when it emerged from bankruptcy onJanuary 2, 2002. (Loewen Bankruptcy News, Issue No. 97;Bankruptcy Creditors' Service, Inc., 215/945-7000)

LUCID ENT: Talks with Lenders to Reduce & Restructure Debt----------------------------------------------------------As previously disclosed, Lucid Entertainment Inc. is currently in default of its financial reporting obligations with respect to its annual audited financial statements for the year ended Dec. 31, 2004, and unaudited interim financial statements for the period ended March 31, 2005. Management of Lucid and Lucid's external auditors are presently engaged in preparing the Company's financial statements.

As previously disclosed on May 10, 2005, the Board of Directors of Lucid and its management team are continuing their efforts to restructure Lucid's debt. Negotiations are underway with various creditors, lenders and lessors to reduce the company's existing debt and restructure Lucid's long and short-term obligations.

Effective April 15, 2005, Lisa Ruscica, Vice President of Corporate Finance of Lucid, resigned but continues to assist Lucid through its restructuring and refinancing efforts.

About the Company

Lucid Entertainment Inc. is a leading operator and developer ofbranded entertainment and hospitality venues internationally.

* * *

As reported in the Troubled Company Reporter on Apr. 28, 2005,Lucid Entertainment Inc. will delay the filing of its annual audited financial statements for the year ended Dec. 31, 2004, and its interim financial statements for the first quarter endedMarch 31, 2005, past their due dates of April 30, 2005, and May 30, 2005.

The delay arises as a result of Lucid's recent business and operational challenges imposed by certain developments, which have all been previously disclosed, including:

(i) the resignation of Lucid's Chairman and Chief Executive Officer

(ii) the ceasing of the operations of Lucid's subsidiary in Manchester, England due to a failure to transfer the liquor serving license required for its operations and its defaults with lenders, creditors and loan guarantors,

(iii) the resignation of a director of Lucid due to conflicts arising from the financial difficulties of Lucid's subsidiary operating in Manchester, England,

(iv) Lucid's and some of its other subsidiaries' default under other material contracts and

(v) the resignation of Lucid's chief accountant.

As a result of these developments Lucid has been forced to manage some significant changes to its business and operations which among other things are limiting its ability to produce the information necessary in order to complete its annual audited financial statements and to fund the services of its accountants in the UK. This information is necessary for the preparation ofLucid's audited annual financial statements.

MAGIC LANTERN: Restructuring Prompts Form 10-Q Filing Delay -----------------------------------------------------------Magic Lantern Group, Inc. (AMEX: GML) did not file its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission on a timely basis on Monday, May 16, 2005. The report could not be completed without unreasonable effort or expense because the Company has experienced significant reductions in support staff as part of its ongoing restructuring efforts. MLG intends to file the report shortly, but not within the statutorily provided grace period granted under Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as amended.

MLG continues to move forward with its restructuring plan. MLG has announced that in addition to its ongoing streamlining of operations it is aggressively pursuing the sale of its legacy distribution business and in the process of soliciting offers for its purchase. The legacy distribution business recorded revenues of CAD$3 million and gross profit of CAD$2 million in 2004.

As previously announced, MLG began its restructuring program earlier this year. Recently, MLG retained the services of the international investment banking firm of Corporate Finance Associates to direct the divestiture of the legacy distribution business, which sells hard copy (VHS and DVD) educational titles to more than 9,500 schools and libraries primarily in Canada and select world markets. MLG plans to use the proceeds of the sale to focus on its direct-to-consumer digital product offerings, TutorBuddyT for in-home use and Magic Lantern InSiteT, customized for educational and corporate institutions. Both products operate from a scalable, subscription-based revenue model, and are currently in use by 10,000 users each month in North America.

Douglas Nix, Managing Partner of Corporate Finance Associates, stated, "The outstanding brand name and market recognition of Magic Lantern Communications has attracted a high level of interest from several well-qualified buyers."

"Year-to-date, we have significantly streamlined our operations by eliminating non-essential employees, cutting costs and reducing overhead in the core distribution business, including the previous sale in 2003 of our dubbing operation which was not in our strategic focus," President and CEO of MLG Bob Goddard stated. "Our future direction lies in the returns that can be generated by focusing on expanding our digital asset indexing, archiving, streaming and management solutions business as our primary driver of near-term growth. We intend to use the proceeds from the sale of our legacy business to fuel the expansion of our digital business. To support these efforts, we have entered into preliminary discussions with a global distribution partner who we believe can leverage its existing distribution network to bring TutorBuddy and Magic Lantern InSite to global markets to positively impact the size and value of our subscription base."

About the Company

Magic Lantern Group, Inc. -- http://www.magiclanterngroup.com/-- operates several strategic subsidiaries and divisions, including the global distribution of videos and DVDs from more than 300 world-renowned producers, its core business for nearly 30 years. Key divisions are Sonoptic Technologies, a pioneer in commercial digital video encoding and online digital video utility and leading provider of third-generation digital technology solutions and the recently launched Magic Vision Digital Media, Inc., a provider of digital on-demand/on-line desktop delivery for sports entertainment, health care, human resource, and corporate governance and compliance industries.

* * *

Going Concern Doubt

As reported in the Troubled Company reporter on May 5, 2005, Schwartz Levitsky Feldman LLP, raised substantial doubt about Magic Lantern Group, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2004. The auditing firm points to the Company's significant recurring losses, working capital deficiency, and lack of long-term financing. Mahoney Cohen & Company CPA, P.C., expressed similar doubts when they audited the Magic Lantern's 2003 financial statements.

The Company's cash position at the current rate of operating activity is insufficient to cover operating costs to June 30, 2005. The Company's working capital deficiency at Dec. 31, 2004, was approximately $6,030,000, which has worsened since Dec. 31, 2003. Historically, the Company has sought financing from its major shareholders. Failing shareholder support and a longer-term financing solution, the sources of capital available to the Company include reduction of discretionary investments in the digitization program and sales and marketing programs designed to increase revenue over the next twelve months.

MERISANT WORLDWIDE: Moody's Junks $136 Mil. Sub. Discount Notes--------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of Merisant Company and its parent Merisant Worldwide, Inc. following material earnings declines in fiscal 2004, and the likelihood that profits, cash flows, and liquidity will remain under pressure as the company seeks to turnaround its operating performance and combat competitive threats. The ratings outlook is stable.

* $47.768 million senior secured term loan A due January 11, 2009, downgraded to B2 from B1;

* $167.105 million senior secured term loan B due January 11, 2010, downgraded to B2 from B1;

* 9.5% $225 million senior subordinated notes due July 15, 2013, downgraded to Caa2 from B3.

The ratings downgrade reflects Merisant's significant sales and margin declines, which were most pronounced in the company's North American retail division in grocery, club and mass channels. Overall EBITDA fell from $110 million to $87 million, resulting in:

* an increase in enterprise level debt-to-EBITDA from 4.9x to 6.0x;

* a decrease in EBITDA less capex interest coverage form 2.7x to 1.4x; and

* a decline in free cash flow to debt from 8.5% to 2.5%.

Market share gains by Johnson & Johnson's Splenda brand and an expensive, unsuccessful competitive response by Merisant (Sugar Lite) were the key drivers of the earnings shortfall. Moody's believes that further erosion in profits and credit metrics is possible as Splenda rolls out additional capacity worldwide or if similar market share losses begin to impact Merisant's foodservice division, where its Equal brand remains strong. Although Moody's recognizes the strategic rationale put in place by the new CEO that will focus on product innovation, the uncertainty, timing, and expense associated with such actions are additional concerns .

The senior secured credit facilities were downgraded only one notch and are now rated one notch higher than the senior implied rating. The notching reflects the superior position of the credit facilities relative to the overall enterprise rating since the facilities, with their first claim on the assets, are likely to experience significantly better recovery prospects relative to the other debt classes in a distressed scenario.

As indicated by the stable outlook, ratings are unlikely to change over the near term. In particular, there is very limited upward rating pressure in the absence of a strong and sustained improvement in the company's operating performance and/or reduced debt levels. However, the stable outlook also reflects Moody's opinion that the new rating levels appropriately capture known business and liquidity risks for the coming year, the latter of which is somewhat aided by Merisant's recent credit agreement amendment to loose covenants.

Further, the stable outlook reflects Merisant's successful competitive defenses in certain regions and the expectation for positive cash flows even in a pressure earnings environment. The failure to maintain these conditions could prompt unfavorable near-term rating actions, and ratings are likely to be downgraded if the company does not remain free cash flow positive and/or it loses borrowing access to its credit facilities.

Merisant Worldwide, Inc. is headquartered in Chicago, Illinois. The company had fiscal-year 2004 revenues of approximately $348 million.

The company packages and distributes low calorie tabletop sweeteners (primarily aspartame and saccharin-based), which include Equal, NutraSweet and Canderel, via food service and retail channels in over 100 countries.

METALDYNE CORPORATION: Moody's Junks $400 Million Unsec. Notes--------------------------------------------------------------Moody's Investors Service downgraded ratings for Metaldyne Corporation and its direct subsidiary Metaldyne Company LLC by one notch, and concluded the review for possible downgrade. Moody's additionally established stable rating outlooks for both entities.

The rating downgrades were driven by challenging industry conditions, together with certain company-specific factors which are impeding Metaldyne's actual and prospective performance.

* high capital expenditures requirements given the capital- intensive nature of Metaldyne's production facilities;

* the continued need to finance significant up-front costs associated with launching Metaldyne's large book of awarded new business; and

* the costs and distractions that had been caused by the independent investigation of Metaldyne's accounting records during 2004.

Metaldyne's expected delivery of increased EBIT cash interest coverage above marginal 1.0x levels and materially reduced leverage and debt levels is now delayed until 2006 or later. EBITA cash interest coverage is expected to run a little higher at about 1.4x. Moody's believes that the comfort level for unused available liquidity is in excess of $200 million (approximately 10% of revenues), versus the approximately $75 million level that Metaldyne had guided the market to as of the close of the first quarter of 2005.

While Moody's action placing Metaldyne's ratings on review for possible downgrade was initially triggered by the company's disclosure that a former Sintered Division controller admitted to fraudulent actions with regard to the company's accounting records, the restatement adjustments that were determined to be necessary following the extensive independent investigation which followed were notably all non-cash in nature and not material enough in the aggregate to justify a downgrade on their own. The company is still in the process of addressing various deficiencies in internal controls that were identified during the independent investigation and by the company's auditors. It is the company's goal to satisfy Section 404 requirements of the Sarbanes-Oxley Act, but the outcome in this regard is still pending.

The stable outlook is based upon Metaldyne's recent performance ahead of many industry peers in terms of revenue growth, customer diversification, and North American light vehicle steel cost recovery.

These specific rating actions were taken with regard to Metaldyne Corporation and Metaldyne Company LLC:

-- Downgrade to Caa2, from Caa1, of the rating for Metaldyne's $250 million of 11% guaranteed senior subordinated unsecured notes due June 2012;

-- Downgrade to Caa1, from B3, of the rating for Metaldyne's $150 million of 10% guaranteed senior unsecured notes due November 2013;

-- Downgrade to B3, from B2, of the ratings for Metaldyne LLC's $600 million ($551 million remaining) of guaranteed senior secured credit facilities, consisting of:

* $400 million ($351 million remaining) guaranteed senior secured term loan D due December 2009;

-- Downgrade to B3, from B2, of Metaldyne's senior implied rating;

-- Confirmation of Metaldyne's Caa1 senior unsecured issuer rating.

The rating downgrades reflect that Metaldyne's operations (exclusive of acquisitions and divestitures) have not generated any positive free cash flow available to service debt since 2001. The company furthermore incurred additional debt during 2004 to finance the New Castle acquisition. For the last twelve months ended April 3, 2005, total debt/EBITDA leverage (including redeemable preferred stock as debt) remained high at about 5.5x and total debt/EBITDAR leverage (also including as debt the present value of operating leases, letters of credit, accounts receivable securitizations, and adjustments to reflect preferred stock at liquidation value) remained very high at about 6.5x.

The company's active use of sale/leasebacks at a rate of 15%-20% of annual capital spending has notably served to moderate the level of on-balance sheet debt while increasing overall available liquidity. EBIT was insufficient to cover cash interest for the period, and is no longer expected to exceed 1.0x until 2006. EBITA cash interest coverage was slightly better during the last twelve months ended, but still below 1.0x.

On a prospective basis EBITA cash interest coverage is expected to run a little higher at about 1.4x. Available liquidity -- consisting of cash and unused effective availability under committed facilities -- approximated $72 million at the close of the first quarter of 2005. While management expects Metaldyne's credit protection measure to improve slightly during 2005 and to demonstrate more dramatic improvement in 2006 based upon rollouts of booked business and estimates regarding production volumes, costs savings and commodity price recoveries, this high-fixed-cost company remains vulnerable to any unexpected developments that are either specific to the company or related to the automotive industry and/or the broader economy. Metaldyne incurred almost $18 million in fees during 2004 in connection with the investigation of the nature and scope of the accounting fraud. This represented a significant and unexpected cash outflow, but is non-recurring in nature.

Metaldyne is a very high volume purchaser of steel, which constitutes the most significant component of the company's cost of goods sold. Management has additionally evaluated that it is not advantageous for Metaldyne to participate in OEM steel resale programs. Instead, the company purchases all of its steel directly under contracts which typically have maturities of one year or longer. Exposure to steel price fluctuations therefore poses a significant ongoing risk to Metaldyne's performance. The margin declines recorded by the company during 2004 were partly attributable to the increased commodity costs for steel and other raw materials. Raw materials spending increased year-over-year by $53 million on a gross basis, and by $22 million net of realized recoveries. Metaldyne's steel price recovery rate in the North American light vehicle market notably appears to be exceeding the rate being achieved by most of its peers.

Metaldyne's business is characterized by high capital intensity and R&D spending. Spending on new equipment has met or exceeded 1.5x depreciation over the past two years in support of launch activity, the initiation of new plants in lower-cost countries such as Korea and Mexico, and the general upgrading of manufacturing assets. Management does notably assert that 2004 was the peak spending year and that capital expenditures should decline by about $30 million to $120 million in 2005. Metaldyne must also continue to invest heavily in the development of new products and technologies in order to maintain a competitive advantage and provide value-added products for which customers are more willing to pay higher margins.

Metaldyne is significantly concentrated with the Big 3 vehicle manufacturers, with approximately 60% direct exposure as a Tier 1 supplier and an additional 20%+ indirect exposure as a Tier 2 supplier. Given the current market environment, it is in the company's favor that the revenue mix has already become somewhat more diversified. With regard to Big 3 exposure, DaimlerChrysler became Metaldyne's largest customer of the three at approximately 24.4% direct exposure upon the company's acquisition of the New Castle plant. Direct exposure to Ford and General Motors approximates 12.5% and 7.2%, respectively (based upon 2004 revenues). Metaldyne is furthermore exposed to the weakness of certain suppliers, which can cause interruptions in supply and result in price increases (such as was the case with the Chapter 11 filings of Intermet Corp. and Citation Corp. during 2004).

Metaldyne's business strategy entails additional acquisitions to achieve greater diversity of products, customers, and technologies, as well as global expansion and improved market share. While the business strategy has strategic merits, the weakness of Metaldyne's balance sheet presents significant potential challenges to credit quality. Moody's remains concerned regarding:

* the way such acquisitions will be financed;

* the size of future transactions and the pace at which they will occur;

* the effectiveness of the due diligence in identifying potential detriments to value; and

* how expensive, time consuming and disruptive the integration processes would be.

The stable outlooks following the rating downgrades reflect that Metaldyne has been relatively more effective versus many peers at efforts to counteract the negative industry dynamics. The company notably achieved 2004 revenue growth in excess of 7.5% (excluding the impact of the New Castle acquisition and certain divestitures), which significantly outperformed the year's Big 3 production decline approximating 2.6%.

In addition, per management's guidance during its May 10, 2005 investor call first quarter 2005 revenue growth was about 20.3%, versus an approximately 9.3% decline in Big 3 production. Metaldyne's new business backlog is with a notably more diversified set of customers. Approximately 60% of new business is with the Big 3, 30% is with Asian manufacturers, and 10% is with European manufacturers. The acquisition of DaimlerChrysler's New Castle plant added about $445 million in Chassis Group revenues and is now generating business with other customers. Hyundai is becoming a very meaningful customer, and Metaldyne is supporting relationship with a new plant that the company just opened in Korea.

Metaldyne also reports that it has negotiated agreements with customers that will offset a majority of its raw materials risk in the future. The company has initiated pass-through indexing arrangements with many customers similar to those already used for aluminum. Management does not expect that these actions will result in a reduced pace of new business awards since the company is well positioned competitively and only about 15% of the product line today consists of commodity-like forged components.

In addition, Metaldyne is selling its own scrap at market and implementing productivity improvements which have thereby enabled it to reduce headcounts. On the basis of the initiatives already taken, Metaldyne estimates that it will achieve about 80% raw material recovery during 2005, even if unfavorable commodity price trends continue. It is notable that the recovery provisions contain no profit margin and stand to drive down operating margins somewhat in a rising commodity price environment (with the opposite effect as prices reverse).

Metaldyne has recently taken several critical steps to enhance liquidity, which would have otherwise been nearly depleted at the end of the first quarter. Metaldyne received more than $21 million cash upon the sale of a 16.1% interest in TriMas Corp. stock in November, 2004, and management believes that the value of Metaldyne's remaining TriMas Corp. holdings exceeds $100 million. However, Moody's notes that TriMas Corp. just withdrew its SEC filing for an initial public offering on May 11, 2005.

During December 2004 Metaldyne also sold its 36% interest in Saturn Electronics for about $15 million in cash proceeds. During December 2004 the company additionally closed an amendment to its guaranteed senior secured credit agreement which included provisions to loosen certain negative covenant tests and provide greater cushion against the likelihood of default.

Metaldyne furthermore amended its accounts receivable securitization agreement upon transferring to a new agent lender, which thereby enhanced the applicable advance rate formulas and extended the expiration date of the facility to January 2007. The New Castle plant's accounts receivable were added to the program during the first quarter. Partially offsetting these enhancements to the securitization program was the reduced availability permitted against General Motors Corporation and Ford Motor Company receivables following from their simultaneous rating downgrades by a rating agency to below investment grade.

Metaldyne's next anticipated step toward enhancing liquidity is to replace the existing securitization with a new and larger $175 million accounts receivable securitization which would also benefit from further improvements to the applicable advance rates and an extended maturity in 2010. Execution of this new agreement should be feasible subject to execution of the intercreditor agreement currently under negotiation with the senior secured lenders, but would present a higher overall cost to the company.

Future events which would be likely to result in additional rating downgrades potentially include:

* sale of the remaining TriMas shares at the expected value and application of the net proceeds against debt;

* substantial improvements to committed liquidity;

* a material equity infusion; and/or

* increased diversification of the revenue base.

Metaldyne Corporation, headquartered in Plymouth, Michigan, is a manufacturer of highly engineered products for the global light vehicle market. Metaldyne designs, engineers and assembles metal-formed and engineered products used in transmissions, engines and chassis of vehicles.

MIIX GROUP: Court OKs Sale of All Operating Assets to MDAdvantage -----------------------------------------------------------------The MIIX Group, Inc., and its debtor-affiliate New Jersey State Medical Underwriters, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to sell substantially all operating assets to MDAdvantage Insurance Company of New Jersey for $1,000,000, free and clear of liens, claims, interests and encumbrances.

The Sale closed on April 12, 2005.

The Debtors will assume the lease and sell and assign the unexpired real property lease owned by Gordon Lawrenceville Realty Associates, L.L.C., the Landlord for property located at 2 Princess Road, Lawrenceville, in New Jersey, to MDAdvantage.

MDAdvantage will also pay $51,784 from the security deposit currently held by Gordon Lawrenceville to cure all defaults.

MDAdvantage and Gordon Lawrenceville have also agreed to amend the lease by:

(a) reducing the square footage of the Lease Premises, and

(b) changing the amount of rent payable under the lease.

A $58,399 amendment fee was paid on April 12, 2005, from the security deposit currently held by Gordon Lawrenceville.

The Debtors told the Court that they cannot continue to operate Underwriters for the time required to confirm and consummate a plan of reorganization without risking an immediate and material decline in the value of the Assets. According to the Debtors, the only way to preserve and maximize the value is to consummate the Sale, thereby insuring an orderly and equitable sale process for the benefit of their estates and creditors.

MIIX GROUP: Wants Exclusive Period Extended Through July 19-----------------------------------------------------------The MIIX Group, Inc., and its debtor-affiliate ask the U.S. Bankruptcy Court for the District of Delaware for an extension of the time within which they alone can file a chapter 11 plan. The Debtors want their exclusive plan filing period extended through and including July 19, 2005. The Debtors also ask the Court for more time to solicit acceptances of that plan from their creditors, through Sept. 17, 2005.

The Debtors have been diligently working to preserve the value of their assets through the retention of professionals and through the sale process. With the recent approval and closing of the sale of substantially all operating assets of the Debtors to MDAdvantage Insurance Company of New Jersey, the Debtors and other parties-in-interest are working toward the development of a consensual plan of liquidation.

The Debtors relate that there are additional complexities in their cases because the Group is a publicly-traded company and one of its non-debtor subsidiaries, MIIX Insurance, is currently in rehabilitation and under the control of a court-appointed rehabilitator.

Various parties-in-interest, including the U.S. Trustee and the Creditors Committee, initially objected to the Sale. The U.S. Trustee asked the Court to appoint an examiner for the Debtors. Over the past 90 days, the Debtors have spent considerable time and resources prosecuting the Sale Motion and opposing the Examiner Motion, including the provision of information and documents at the formal and informal requests of the U.S. Trustee and the Creditors Committee.

The U.S. Trustee and the Creditors Committee conducted numerous depositions and interviews of the Debtors' officers, directors, and former employees. The Debtors' resources were also utilized to negotiate a consensual resolution of the objections to the Sale Motion, withdrawal of the Examiner Motion, and modifications to the Purchase Agreement beneficial to the Debtors' bankruptcy estates. The Debtors contend that the consummation of the Sale and withdrawal of the Examiner Motion were necessary prerequisites to formation of a plan of liquidation on terms that, hopefully, will be acceptable to the various constituencies in their bankruptcy cases.

The Debtors anticipate that they will complete and file a plan and disclosure statement within the 90-day extension period. The passing of the March 15 Bar Date will permit the Debtors to better evaluate the number of creditors and classes of creditors in their cases.

MIRANT CORP: Asks Court to Approve Solicitation Procedures----------------------------------------------------------To conduct an effective solicitation of acceptances and rejections of Mirant Corporation's plan of reorganization that is consistent with applicable laws, Mirant and its debtor-affiliates ask U.S. Bankruptcy Court for the Northern District of Texas to:

(a) establish a record date for voting purposes;

(b) approve the forms of ballots and balloting instructions;

(c) establish procedures for:

(1) voting in connection with the Plan confirmation process; and

(2) temporary allowance of claims related thereto; and

(d) establish procedures for tabulating votes on the Plan.

Bankruptcy Services, LLC, and Financial Balloting Group, LLC,will assist the Debtors in the solicitation, balloting andtabulation of the votes of the Debtors' creditors and equityholders on the Plan.

A. Proposed Voting Procedures

a. If a claim is deemed allowed pursuant to the Plan, then that claim will be allowed for voting purposes;

b. If a filed proof of claim asserts a claim in a wholly undetermined or unliquidated amount or is docketed in BSI's database as of the Record Date in the amount of $0, then that claim will be allowed for voting purposes as a general unsecured claim only in the amount of $1.00;

c. If a filed proof of claim asserts a claim in a partially undetermined or unliquidated amount, then that claim will be allowed for voting purposes only in the amount of the known or liquidated portion of the claim;

d. If a claim has been estimated and allowed by Court order, then that claim will be allowed for voting purposes in the amount approved by the Court;

e. If a claim is listed in the Debtors' Schedules as contingent, unliquidated, or disputed and a proof of claim was not timely filed, then that claim will be disallowed for voting purposes;

f. If the Debtors object to a claim, then that claim will be disallowed for voting purposes, as applicable;

g. The allowed amount of any proof of claim for voting purposes will be the amount as docketed in BSI's claims database as of the Record Date;

h. Classification of a claim will be determined based on the classification as docketed in BSI's claims database as of the Record Date; provided, however, that any claims for which BSI was unable to identify the classification will be classified as general unsecured claims;

i. If a single proof of claim has been filed against multiple Debtors, then that claim will be allowed for voting purposes only against the Debtor as docketed in BSI's claims database as of the Record Date;

j. If a claim or equity interest is allowed pursuant to a Court-approved settlement, then that claim will be entitled to vote on the Plan in accordance with the terms of that settlement;

k. If a proof of claim asserts a claim that is not in U.S. dollars, that claim will be treated as unliquidated and allowed for voting purposes only in the amount of $1.00;

l. If a proof of claim is filed late, then that claim will be disallowed for voting purposes only;

m. If a proof of claim does not list a Debtor or the Debtor is unidentifiable on the proof of claim, then that claim will be disallowed for voting purposes;

n. If a claim is disallowed or equitably subordinated, then that claim will be disallowed for voting purposes only;

o. If the Debtors schedule a claim and the creditor filed a proof of claim superseding that scheduled claim, the scheduled claim is deemed superseded and that scheduled claim will be disallowed for voting purposes;

p. If a union representative or plan administrator of an employee benefit program filed a claim on behalf of its constituents, then:

(i) that constituent creditor will only be entitled to vote its claim in the amount and classification set forth in the claim filed by the union representative or plan administrator and any other separate claim filed by a constituent creditor based on the same facts and circumstances alleged in the claim filed by the union representative or plan administrator will be disallowed for voting purposes; and

(ii) the union representative or plan administrator will not be entitled to vote any amount on account of its proof of claim; and

q. The Debtors may seek a Court order disallowing a claim for voting purposes at anytime prior to the Confirmation Hearing.

B. Temporary Allowance Motions

If any claimant seeks to challenge allowance or disallowance of its claim for voting purposes that entity is directed to serve on the Debtors and file with the Court a motion seeking entry of an order pursuant to Bankruptcy Rule 3018(a) temporarily allowing that claim only for purposes of voting to accept or reject the Plan.

C. Proposed Solicitation Procedures

a. Record Date

The Debtors ask the Court to set April 27, 2005, as the Record Date for solicitation of holders of claims and equity interests.

b. Proposed Form of Ballots

The Ballots are based on Official Form No. 14 pursuant to Rule 3018(c) of the Federal Rules of Bankruptcy Procedure. The Form have been modified to provide clear instructions to the Debtors' creditors as to voting procedures, the vote tabulation process and the effects of casting a particular Ballot.

The appropriate Ballot forms will be distributed to holders of claims according to the nature of their claims.

c. Public Securities Claims

The Debtors will solicit votes from creditor constituencies entitled to vote directly on the Plan and whose underlying claims arise from debt securities, equity interests, or similarly situated obligations in which multiple creditors hold a portion of the ultimate claim or equity interests.

The Debtors propose that the Solicitation Packages be sent in a manner customary in the securities industry so as to maximize the likelihood that beneficial holders of the Public Securities will receive the materials in a timely fashion.

The balloting process for the Public Securities is multiple-tiered because the Debtors need to solicit votes through the trustee, agent bank, broker, dealer or other agents or nominees for the ultimate beneficial holders of the claims or interests.

d. Solicitation Packages and Distribution Procedures

The Debtors will mail Solicitation Packages by no later than seven days after entry of a Court order granting the Solicitation Procedures Motion.

The Solicitation Packages will contain copies of:

-- the Disclosure Statement Order;

-- the confirmation hearing notice;

-- an applicable Ballot, together with the applicable voting instructions and a pre-addressed postage pre-paid return envelope; and

-- a CD-ROM containing the Disclosure Statement.

To facilitate the distribution to the Beneficial Holders, the Debtors ask that the Court order each of the Voting Nominees to distribute Solicitation Packages to the Beneficial Holders within five business days of the Voting Nominee's receipt of the Solicitation Packages.

e. Publication Notice

The Debtors will cause the Confirmation Hearing Notice to be published once in The Wall Street Journal (National Edition), The New York Times (National Edition), USA Today and Financial Times. Additionally, the Debtors will publish the Confirmation Hearing notice electronically at

a. Votes will be tabulated both on an individual debtor basis for each relevant class and on a consolidated basis for each relevant class within a proposed consolidated group.

b. A vote will be disregarded if the Court determines that a vote was not solicited or procured in good faith or in accordance with the provisions of the Bankruptcy Code.

c. Any Ballot that is returned to the Solicitation and Tabulation Agent, but which is unsigned, or has a non- original signature, will not be counted, unless otherwise ordered by the Court.

d. All votes to accept or reject the Plan must be cast by using the appropriate Ballot and in accordance with the voting instructions.

e. A holder of claims and/or equity interests in more than one class must use separate Ballots for each class of claims and/or equity interests.

f. If multiple Ballots are received for a holder of claims voting the same claims, the last Ballot received, as determined by the Solicitation Agent or the Tabulation Agent will be the Ballot that is counted.

g. If multiple Ballots are received from different holders purporting to hold the same claim or equity interest, the last Ballot received prior to the Voting Deadline will be the Ballot that is counted.

h. If multiple Ballots are received from a holder of a claim or equity interest and someone purporting to be his, her, or its attorney or agent, the Ballot received from the holder of the claim or equity interest will be the Ballot that is counted, and the vote of the purported attorney or agent will not be counted, unless otherwise ordered by the Court.

i. A Ballot that is completed, but on which the claimant or holder of equity interest did not indicate whether to accept or reject the Plan or that indicates both an acceptance and rejection of the Plan will not be counted, unless otherwise ordered by the Court.

j. Any Ballot that partially accepts and partially rejects the Plan will not be counted, unless otherwise ordered by the Court.

k. A holder of claims or equity interest will be deemed to have voted the full amount of its claim in each class and will not be entitled to split its vote within a class.

l. If no votes to accept or reject the Plan are received with respect to a particular class, that class is deemed to have voted to accept the Plan.

m. Ballots sent by facsimile, telecopy transmission or electronic mail, unless otherwise ordered by the Court, will not be accepted.

n. For the purpose of voting on the Plan, the Solicitation and Tabulation Agent will be deemed to be in constructive receipt of any Ballot timely delivered to any address that the Solicitation and Tabulation Agent designates for the receipt of Ballots cast on the Plan.

Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 63; Bankruptcy Creditors'Service, Inc., 215/945-7000)

MIRANT CORP: Wants to Expand Scope of Deloitte's Engagement-----------------------------------------------------------In an interim order, the U.S. Bankruptcy Court for the Northern District of Texas authorized Mirant Corporation and its debtor-affiliates to expand the scope of Deloitte & Touche, LLP's engagement set forth in the Seventh Application and Engagement Letter between the parties effective as of February 25, 2005. Pursuant to the Engagement Letter, Deloitte will assist the Debtors in determining whether certain special purpose entities should be consolidated in the financial statements under FASB Interpretation No. 46 as it relates to power purchase agreements in place at Mirant Mid-Atlantic and Jamaica Public Service Company.

However, Judge Lynn did not approve the indemnificationprovisions of the Engagement Letter, provided that Deloitte isafforded any and all protections afforded Protected Professionalsand Protected Persons within the August 6, 2003 Order restrictingpursuit of certain persons.

On the Effective Date of the Debtors' Plan of Reorganization,Deloitte is entitled to enforce all of the provisions set forthin the Engagement Letter, including but not limited to theindemnification provisions, provided that the indemnificationprovisions will not be applicable with respect to any acts oromissions that occurred before the Plan Effective Date.

Absent any objection by June 19, 2005, the Interim Order willbecome final without need for further action.

Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 62; Bankruptcy Creditors'Service, Inc., 215/945-7000)

MIRANT CORP: Wants Gunderboom-Related Claims Estimated at $0------------------------------------------------------------Mirant Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to estimate the proofs of claim asserted by Gunderboom, Inc., and the Gunderboom Shareholders:

Because the documents attached to the Estimation Motions are confidential, the Debtors filed the Estimation Motions directly with the Clerk of the Court.

Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 61; Bankruptcy Creditors'Service, Inc., 215/945-7000)

NATIONAL CENTURY: Agrees to Toll Scott Entities' Claims-------------------------------------------------------In a Court-approved stipulation, National Century FinancialEnterprises, Inc., and its debtor-affiliates and the Unencumbered Assets Trust on one hand and Steven M. Scott and Rebecca J. Scott, representing 58 other entities, on the other hand, agree to toll applicable statutes of limitations, with respect to their claims against each other.

The Debtors, the Unencumbered Assets Trust and the Scott Entitiesare currently engaged in settlement discussions to avoid the costand expense of unnecessary litigation and to preserve all oftheir legal rights without allowing any applicable statute oflimitations or time-based defense.

Specifically, the parties agree that:

(a) The running of any statute of limitations or time-based legal or equitable defenses, are tolled through May 31, 2005.

(b) In the event Florida Health Plan Holdings, L.L.C., transfers to any Scott Entity, (i) its claims in that certain action against Health Insurance Plan of Greater New York et al. pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, and (ii) its rights in and to the proceeds of that litigation, the Scott Entity transferee agrees that:

(1) the NCFE Entities' rights against and interests in and to the HIP Litigation and proceeds thereof will be of the same right and priority of payment as they are, as of April 14, 2005, against Holdings; and

(2) all of the rights and remedies of the Trust and the Debtors with respect to the transfer are preserved in favor of the NCFE Entities.

(c) Notwithstanding any other provisions of the Stipulation, either party, may commence any litigation against the other party during the Tolled Period. Either party may assert limitation or time-based defenses as to any NCFE Claims or Scott Claims that would have become time-barred during the Tolled Period unless the Claims are brought on or before May 31, 2005.

NATIONAL ENERGY: Inks Pact to Settle Cinergy's $320,000 Claim-------------------------------------------------------------NEGT Energy Trading - Gas Corporation and Cinergy Marketing & Trading, LP, are parties to a settlement agreement and mutual release, under which, Cinergy will pay $320,000 to ET Gas in full and final satisfaction of all claims arising out of the transactions between parties from January to December 2002. The parties will release each other from any liabilities arising out of the 2002 Transactions.

The Debtors believe that the Settlement Agreement is advantageous in that it avoids risk associated with litigation. Moreover, the $320,000 Settlement Amount approximates the maximum recovery that ET Gas could otherwise receive in litigation.

NEXMED INC: Selling 445 Million Shares via Private Placement------------------------------------------------------------NexMed, Inc. (Nasdaq: NEXM) entered into an agreement to sell an aggregate of 445 shares of convertible preferred stock and warrants to purchase 1,188,931 shares of common stock. The preferred shares will have a liquidation preference of $10,000 per share and will be convertible into shares of the Company's common stock at an initial conversion value of $1.36. Under the terms of the preferred shares, the Company will redeem at the liquidation preference per share or convert preferred shares quarterly, beginning on September 30, 2005 with up to $2 million in aggregate liquidation preference being redeemed or converted and thereafter up to $1 million per quarter. Any quarterly conversions will be at a 4.5% discount to the then current market price. The Company will also have the right to force conversion of the preferred shares under certain circumstances. The warrants will have a 4-year term and an exercise price of $1.43 per share. The Company expects to receive gross proceeds of $4.45 million from this financing and will use the proceeds for general corporate purposes.

The securities to be sold in this private placement will not have been registered under the Securities Act of 1933 and may not be offered or sold in the United States in the absence of an effective registration statement or an exemption from the registration requirements.

About the Company

NexMed, Inc., is an emerging drug developer that is leveraging its proprietary drug technology to develop a significant pipeline of innovative pharmaceutical products to address large unmet medical needs. Its lead NexACT(R) product under development is the Alprox-TD(R) cream treatment for erectile dysfunction. The Company is also working with various pharmaceutical companies to explore the incorporation of NexACT(R) into their existing drugs as a means of developing new patient-friendly transdermal products and extending patent lifespans and brand equity.

* * *

Going Concern Doubt

In its Form 10-K for the year ended Dec. 31, 2004, filed with the Securities and Exchange Commission, the Company's independent registered public accounting firm has concluded that there is substantial doubt about NexMed's ability to continue as a going concern due to the Company's losses to date, expected losses in the future, limited capital resources and accumulated deficit.

"These factors may make it more difficult for us to obtain additional funding to meet our obligations," the Company said in its regulatory filing. "Our continuation is dependent upon our ability to generate or obtain sufficient cash to meet our obligations on a timely basis and ultimately to attain profitable operations. We anticipate that we will continue to incur significant losses at least until successful commercialization of one or more of our products, and we may never operate profitably in the future."

Newcastle IV is a cash flow collateralized debt obligation that closed March 30, 2004. The portfolio is composed of approximately 58.7% commercial mortgage-backed securities, 20.5% residential mortgage-backed securities, 18.8% real estate investment trust securities, and 2.0% asset-backed securities. Included in this review, Fitch discussed the current state of the portfolio and the portfolio management strategy with the asset manager.

As stated in the April 29, 2005, trustee report, Newcastle IV has $438 million in collateral debt securities and an additional $11.8 million in principal proceeds that can be reinvested in additional collateral. There are currently no defaulted assets included in the portfolio, and the weighted average rating of the assets has remained stable at 'BBB/BBB-'. Each of the four overcollateralization and interest coverage tests are currently in compliance with their respective performance test measures due to the steady performance of the portfolio.

The rating of the class I notes addresses the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class II, III, IV and V notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date.

As a result of this analysis, Fitch has determined that the current ratings assigned to the class I, II, III, IV, and V notes still reflect the current risk to noteholders. Fitch will continue to monitor and review this transaction for future rating adjustments.

NORTEL NETWORKS: Appoints Paul Karr as Controller-------------------------------------------------Nortel Networks Corporation (NYSE:NT) (TSX:NT) and its principal operating subsidiary Nortel Networks Limited, provided a status update pursuant to the alternative information guidelines of the Ontario Securities Commission. These guidelines contemplate that the Company and NNL will normally provide bi-weekly updates on their affairs until such time as they are current with their filing obligations under Canadian securities laws.

Nortel announced the appointment of Paul Karr as controller, effective May 4, 2005. As controller, Karr is the chief architect and driver of strengthening the financial controls for the Company. Karr leads a large, global finance team and is responsible for directing and improving the organization and for the preparation of all external financial reporting in accordance with U.S. generally accepted accounting principles.

Karr is a seasoned finance executive and accounting expert who until recently was Vice President and Financial Controller for Bristol-Myers Squibb Company in New York. He was specifically recruited by Bristol-Myers Squibb to lead the financial function during a difficult restatement process.

Prior to his tenure at Bristol-Myers Squibb, Karr held a number of increasingly responsible positions at GE Capital Market Services culminating in his role as Senior Vice President and Chief Accounting Officer. Karr also spent fifteen years at Deloitte & Touche where he was promoted to National Consultation Partner.

A graduate of the University of Illinois, Urbana-Champaign, Karr holds both a Bachelor of Science degree in Accounting, as well a Master's Degree Accounting from the university.

Karr reports to executive vice-president and chief financial officer Peter Currie. Karen Sledge, who had been serving as interim controller since February 2005, is vice-president, finance and continues to report to the CFO.

Karr and Sledge have also been appointed controller and vice-president, finance, respectively, of NNL.

The Company and NNL reported that there have been no material developments in the matters reported in their status updates of June 2, 2004 through May 2, 2005, with the exception of the matters described above.

About the Company

Nortel Networks -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. Nortel does business in more than 150 countries.

* * *

As reported in the Troubled Company Reporter on Jan. 31, 2005, Standard & Poor's Ratings Services affirmed its 'B-' credit rating on Nortel Networks Lease Pass-Through Trust certificates series 2001-1 and removed it from CreditWatch with negative implications, where it was placed Dec. 8, 2004.

The affirmation is based on a valuation analysis of properties that provide security for the two notes that serve as collateral for the pass through trust certificates.

The initial rating on the securities relied upon the ratings assigned to both Nortel Networks Ltd. and ZC Specialty Insurance Co. The Dec. 8, 2004, CreditWatch placement followed the Dec. 3, 2004 withdrawal of the rating assigned to ZC.

The properties are secured by five single-tenant, office/R&D buildings in Research Triangle Park, North Carolina that are leased to Nortel (B-/Watch Developing), which guarantees the payment and performance of all obligations of the leases. The lease payments do not fully amortize the notes. A surety bond from ZC insures the balloon amount.

Due to the withdrawal of the rating on ZC, Standard & Poor's current analysis incorporates the rating on Nortel and internal valuations of the properties, including balloon risk. The valuations factored in current market data. The rating will not necessarily be in alignment with Nortel's due to the balloon risk, which is no longer mitigated by a rated entity.

A balloon payment of $74.7 million is due at maturity in August 2016. If this amount is not repaid, the indenture trustee can obtain payment from the surety, provided certain conditions are met.

OCCAM NETWORKS: March 31 Balance Sheet Upside-Down by $16 Million-----------------------------------------------------------------Occam Networks Inc. (OTCBB: OCCM) reported results for the first quarter of 2005, which ended March 31, 2005. The company reported revenue for the quarter of $6.9 million, setting a new company record for the third consecutive quarter. The company also added 13 new customers during the quarter, continuing to add new customers at double-digit rates for the third consecutive quarter.

"Occam's focus on delivering exceptional Ethernet- and IP-based products to telcos has resulted in another solid quarter of growth for the company," said Bob Howard-Anderson, president and CEO of Occam Networks. "This is the third consecutive quarter in which we have experienced record revenues and high customer acquisition rates. The telcos' increasing preference for Ethernet and IP technologies in the access network is driving our robust growth. We expect our leadership, expertise and experience with these technologies to continue to drive our success."

During the first quarter of 2005, Occam signed a strategic alliance with Tellabs (Nasdaq: TLAB), which opened up market opportunities with large North American Local Exchange Carriers for Occam's IP-based loop carrier equipment. As part of the agreement, Tellabs also licensed Occam's Ethernet transport technologies for integration into Tellabs(R) FiberDirect(SM) portfolio. Occam gained access to Tellabs' cabinet products, enabling Occam to provide new and existing IOC customers with more deployment options. The company also completed the private placement portion of its Series A-2 Preferred Stock Financing, which resulted in cash proceeds of $10.6 million.

OMNI ENERGY: Issues Series C 9% Convertible Preferred Stock -----------------------------------------------------------Omni Energy Services Corp. (Nasdaq: OMNI) entered into a Securities Purchase Agreement, dated as of May 17, 2005, with certain of the Company's current stockholders and executive officers for the issuance of up to $5 million of Series C 9% Convertible Preferred Stock, in connection with the previously announced $65 million of new senior credit facilities. The Series C Investors are led by Dennis Sciotto, who currently owns approximately 1,040,000 shares of the Company's common stock. Further, as a condition to entering into the Securities Purchase Agreement, Dennis Sciotto required the 10% participation in the Series C Preferred Stock by the Company's executive officers.

The Series C Preferred Stock has a liquidation value of $1,000 per share plus accrued and unpaid dividends and is convertible at the conversion price of $1.95 per share. In connection with the issuance of the Series C Preferred Stock, the Company also agreed to issue warrants representing the right to purchase up to 6,550,000 shares of the Company's common stock with exercise prices, subject to adjustments as provided therein, ranging from $1.95 per share to $3.50 per share (premiums to bid prices at the date of closing ranging from 20% to 120%). The warrants may be exercised at any time from one day after their issuance and until the fifth anniversary of their issuance.

The transactions contemplated by the Securities Purchase Agreement close in two tranches. On May 17, 2005, the closing date of the first tranche, the Company issued an aggregate of 3,500 shares of Series C Preferred Stock and warrants to acquire 4,585,000 shares of the Company's common stock, in exchange for $3,500,000. Subject to the terms and conditions set forth in the Securities Purchase Agreement, the second tranche is scheduled to close onAugust 15, 2005, at which time the remainder of the Series C Preferred Stock and warrants will be issued.

The terms and conditions of the Series C 9% Convertible Preferred Stock was determined by arms length negotiations between the parties and a fairness opinion thereon was issued by an independent third party.

About the Company

Headquartered in Carencro, LA, OMNI Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of on-shore seismic data and through its aviation division, transportations services to oil and gas companies operating in the shallow, offshore waters of the Gulf of Mexico. The company provides its services through several business divisions: Seismic Drilling (including drilling, survey and permitting services), Aviation Transportation (including helicopter support) and Environmental Services. OMNI's services play a significant role with geophysical companies who have operations in marsh, swamp, shallow water and the U.S. Gulf Coast also called transition zones and contiguous dry land areas also called highland zones.

* * *

As reported in the Troubled Company Reporter on May 13, 2005 Omni Energy Services Corp.'s independent registered public accounting firm, Pannell Kerr Forster of Texas, P.C., questions the company's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2004. The auditors point to the Company's significant operating losses reported in fiscal 2004, the current default with respect to certain Company debt, and a lack of external financing to fund working capital and debt requirements.

The Company is in the process of securing financing from prospective investors, that if successful, will refinance the current debt service obligations, and in conjunction with cash flows from operations and sales of certain non-core assets, will serve to mitigate the factors that have raised doubt about the Company's ability to continue as a going concern.

-- the payment of approximately $4 million in cash to the Debenture Holders;

-- the issuance of 2 million shares of common stock to the Debenture Holders; and

-- the issuance to the Debenture Holders of approximately $4.3 million of 8% subordinated notes payable over 3 years.

The Company stated that in exchange for the full and completeextinguishment of the Debentures and the cure of all outstanding defaults, the Company would agree to dismiss the Debenture Holders from certain litigation recently filed by the Company against the Debenture Holders alleging, among other things, violations of Section 16(b) of the Securities Exchange Act of 1934.

About the Company

Headquartered in Carencro, LA, OMNI Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of on-shore seismic data and through its aviation division, transportations services to oil and gas companies operating in the shallow, offshore waters of the Gulf of Mexico. The company provides its services through several business divisions: Seismic Drilling (including drilling, survey and permitting services), Aviation Transportation (including helicopter support) and Environmental Services. OMNI's services play a significant role with geophysical companies who have operations in marsh, swamp, shallow water and the U.S. Gulf Coast also called transition zones and contiguous dry land areas also called highland zones.

* * *

As reported in the Troubled Company Reporter on May 13, 2005, Omni Energy Services Corp.'s independent registered public accounting firm, Pannell Kerr Forster of Texas, P.C., questions the company's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2004. The auditors point to the Company's significant operating losses reported in fiscal 2004, the current default with respect to certain Company debt, and a lack of external financing to fund working capital and debt requirements.

The Company is in the process of securing financing from prospective investors, that if successful, will refinance the current debt service obligations, and in conjunction with cash flows from operations and sales of certain non-core assets, will serve to mitigate the factors that have raised doubt about the Company's ability to continue as a going concern.

OMNI ENERGY: Modifies Terms of $3 Million Subordinated Debt -----------------------------------------------------------Omni Energy Services Corp. (Nasdaq: OMNI) entered into certain Surrender of Note Agreements and Release and Satisfaction Interest in Note Agreements with certain of its subordinated debt holders that revises the payment terms of $2 million of the $3 million in outstanding subordinated debt issued in connection with the Company's June 2004 acquisition of Trussco, Inc. In addition, the Settlement Agreements cancel $1 million of the $3 million Earnout Note also issued in connection with the Trussco acquisition.

Under the terms of the Settlement Agreements, OMNI will pay to the holders of the subordinated debt, $1 million cash on or before August 16, 2005 and will issue the subordinated debt holders 200,000 shares of the Company's common stock in full and complete satisfaction of $2 million of the subordinated debt and cancellation of $1 million of the Earnout Note. The terms of the balance of $1 million of the subordinated debentures and $2 million of the Earnout Note will remain unchanged.

About the Company

Headquartered in Carencro, LA, OMNI Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of on-shore seismic data and through its aviation division, transportations services to oil and gas companies operating in the shallow, offshore waters of the Gulf of Mexico. The company provides its services through several business divisions: Seismic Drilling (including drilling, survey and permitting services), Aviation Transportation (including helicopter support) and Environmental Services. OMNI's services play a significant role with geophysical companies who have operations in marsh, swamp, shallow water and the U.S. Gulf Coast also called transition zones and contiguous dry land areas also called highland zones.

* * *

As reported in the Troubled Company Reporter on May 13, 2005, Omni Energy Services Corp.'s independent registered public accounting firm, Pannell Kerr Forster of Texas, P.C., questions the company's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2004. The auditors point to the Company's significant operating losses reported in fiscal 2004, the current default with respect to certain Company debt, and a lack of external financing to fund working capital and debt requirements.

The Company is in the process of securing financing from prospective investors, that if successful, will refinance the current debt service obligations, and in conjunction with cash flows from operations and sales of certain non-core assets, will serve to mitigate the factors that have raised doubt about the Company's ability to continue as a going concern.

OSE USA: April 3 Balance Sheet Upside-Down by $47 Million---------------------------------------------------------OSE USA Inc. (OTCBB:OSEE), reported its results for the first quarter and year ended April 3, 2005.

Revenues from the continuing operations were $645,000 and $1,023,000 for the first quarter ended April 3, 2005 and March 28, 2004, respectively. The Company reported a net loss from operations applicable to common stockholders of $588,000, for the first quarter of 2005, compared with a net loss of $308,000 for the first quarter of 2004.

About the Company

Founded in 1992, OSE USA, Inc. has been the nation's leading onshore advanced technology IC packaging foundry. In May 1999 Orient Semiconductor Electronics Limited (OSE), one of Taiwan's top IC assembly and packaging services companies, acquired a controlling interest in IPAC, boosting its US expansion efforts. After the closure of its US manufacturing operations, the Company has focused on servicing its customers through its offshore manufacturing affiliates. OSE USA's customers include IC design houses, OEMs, and manufacturers.

OWENS CORNING: Court Allows Citadel's Claim for $1.28 Million------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves the stipulation among Owens Corning and its debtor-affiliates and Citadel Credit Trading, Ltd., allowing Citadel Credit's $1,278,282 general unsecured claim.

As reported in the Troubled Company Reporter on Apr. 7, 2005, Citadel Credit as assignee of claims originally held by The Dow Chemical Co., Commercial Alloys Corporation, and Sarcom Desktop Solutions, Inc., filed Claim No. 6647 against Owens Corning and its debtor-affiliates for $1,278,282 based on the claims of the prior owners.

To avoid cost and delay of litigation, the Debtors and CitadelCredit agreed that Citadel Trading will be deemed to have twoallowed, general, unsecured non-priority claims -- one againstOwens Corning for $902,341, and one against Exterior Systems,Inc. for $209,071.

Citadel Trading agreed to amend Claim No. 6647, which willsupercede any amounts scheduled by any of the Debtors withrespect to the claims of Dow Chemical, Commercial Alloys andSarcom Desktop after the Bankruptcy Court approves theStipulation.

OWENS CORNING: CSFB Appealing $7-Bil. Asbestos Claim Estimate-------------------------------------------------------------Credit Suisse First Boston, as agent for Owens Corning's prepetition bank lenders, will take an appeal to the United States Court of Appeals for the Third Circuit from:

The $7.3 million class H remains at 'D' due to a cumulative principal loss of $3.8 million since issuance. Classes J-1 and J-2 have been reduced to $0 due to realized losses, and classes A-1, A-2, A-EC, B, C, and D have paid in full.

The affirmations are due to increased credit enhancement offsetting the increasing concentrations within the deal. As of the May 2005 distribution date, the deal has paid down 83.9%, to $35.7 million from $222.3 million from issuance, with 17 loans remaining from the original 85. The remaining loans have maturity dates from 2007 to 2012.

Retail properties collateralize 70.4% of the deal and the top five loans comprise 44.6%. In addition, there is one specially serviced loan (3.3%) collateralized by a former Frank's Nursery and Crafts store in Joliet, Illinois. Bankruptcy proceedings continue; however, given recent broker opinions of value, losses are not expected at this time. The loan remains current. There is one 30-day delinquent loan (8.8%) collateralized by a retail center in Little Rock, Arkansas.

QUEEN'S SEAPORT: Court Extends Lease Decision Period to July 15---------------------------------------------------------------Queen's Seaport Development, Inc., sought and obtained an extension from the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, within which it can decide whether to assume, assume and assign, or reject various leasehold contracts through July 15, 2005.

The leases give the Debtor rights over the ship Queen Mary including various submerged lands, improvements on adjacent lands and water rights.

The City of Long Beach has claimed unpaid percentage rent of approximately $3,452,098 plus an undetermined amount due and owing in 2004 from the leases. The City further asserts non-monetary defaults on the lease because of the Debtors' failure to maintain the Queen Mary in good condition. Queen's Seaport has disputed the validity of these two claims.

Headquartered in Long Beach, California, Queen's Seaport Development, Inc., -- http://www.queenmary.com/-- operates the Queen Mary ocean liner, various attractions and a hotel. The Company filed for chapter 11 protection on March 15, 2005 (Bankr. C.D. Calif. Case No. 05-15175). When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million.

All the ratings were removed from CreditWatch where they had been placed with negative implications on April 28, 2005. At that time, Norcross, Georgia-based Rock-Tenn announced the $540 million primarily debt-financed acquisition of unrated Gulf States Paper Corp.'s pulp, paperboard, and packaging businesses. The outlook is negative.

"The ratings on the notes were lowered because they are in a disadvantaged position compared to the company's proposed $700 million credit facility, because of operating subsidiary guarantees on the proposed credit facility," said Standard & Poor's credit analyst Dominick D'Ascoli.

At the same time, based on preliminary terms and conditions, Standard & Poor's assigned its 'BB' bank loan rating to the company's proposed $700 million senior unsecured credit facility, consisting of a $250 million term loan and a $450 million revolving credit facility. Rock-Tenn is expected to use the proceeds from the credit facility to fund the acquisition and retire its $75 million revolving credit facility.

Rock-Tenn is a leading manufacturer of folding cartons and paperboard.

"Given competitive industry conditions, the likelihood of continued high fiber costs, and the difficulty of passing through cost increases to customers, we believe the company will be challenged to achieve its debt-reduction targets. Should progress toward lower debt levels falter, ratings would likely be lowered," Mr. D'Ascoli said.

SANMINA-SCI: Moody's Affirms Low-B Ratings on $2.4 Billion Debts----------------------------------------------------------------Moody's Investors Service revised the ratings outlook of Sanmina-SCI Corporation to negative from stable, while at the same time affirming the existing ratings.

The outlook change reflects:

* a more subdued outlook in the company's end markets;

* expectations of a sub-par operating environment for the company over the medium term; and

* margin compression resulting from the intense competition within the industry.

The overall ratings continue to be supported by:

* the company's market position, * more than adequate liquidity position, and * an improving balance sheet through deleveraging.

Although Sanmina has posted modestly improved operating performance during the last twelve months ended March 2005, operating environment will likely continue to be lackluster. Moody's believes that a combination of Sanmina's higher than average exposure to the volatile PC market and industry-wide overcapacity partly contributes to the weak operating outlook for Sanmina. The company recently announced $979 million goodwill impairment and deferred tax asset valuation allowance.

Sanmina has been endeavoring to diversify into non-traditional end markets (industrial & semiconductor, aerospace & defense, medical and automotive) which currently represent about 20% of Sanmina's total revenue. The company has generated moderate free cash flow on a trailing twelve months basis. The ratings also reflect the company's highly leveraged capital structure (4.1x total debt and 4.4x rent adjusted total debt to adjusted TTM EBITDA as of March 2005), and sub-optimal capital return levels.

These ratings also incorporate the company's solid tier 1 market position serving high margin end markets that include enterprise computing & storage and communications infrastructure (43% of total sales in the last twelve months ended March 2005). The company's vertical components manufacturing solution, when operating efficiently and in a "bundled concept" with Sanmina's emerging original design manufacturing and long established EMS offerings, deliver tangible competitive differentiation in terms of the value proposition to the various end market OEMs. The market appeal of these offerings has been affirmed through recent, across the board program wins involving industry leading companies. Moody's will continue to monitor Sanmina's operating performance from its key strategic initiatives (end market diversification, increased ODM activity; lower cost base, vertical integration, and more effectively utilized PCB operations).

The ratings may encounter near term upward pressure from the company's ability to deliver stronger, sustainable cash flow from operations and free cash flow, resulting from some combination of:

(4) deteriorated credit statistics that include total debt to EBITDA at or in excess of 4.5x and EBITDA less Capital Expenditures to Interest of less than 2.0x.

The company's SGL-1 speculative grade liquidity rating continues to be supported by the company's approximate $1.2 billion predominantly unrestricted cash & cash equivalents balances as of the March quarter and supplemental liquidity sources in the form of a $500 million revolver as well as its ability to monetize up to $200 million per quarter in foreign accounts receivable. The ratings also take into account its requirement to meet the approximate $225 million 0% convertible put scheduled for September 2005.

Headquartered in San Jose, California, Sanmina-SCI Corporation is a leading electronics contract manufacturing services company providing a full spectrum of integrated, value added solutions. For the last twelve months ended March 2005, the company generated approximately $12.5 billion in net sales and $460 million in Adjusted EBITDA (excludes non-recurring and unusual charges).

Sanmina's current senior implied ratings is Ba2.

SASCO NET: Moody's Downgrades Class A Notes to Ba2 From Baa1------------------------------------------------------------Moody's Investors Service has downgraded the SASCO Net Interest Margin Trust 2003-12XS Class A notes. Net Interest Margin transactions such as this one represent:

These residual cashflows are sensitive to a number of factors including:

* prepayment speeds;

* cumulative losses incurred on the underlying deal's collateral;

* impact of a step-down date; and

* breach of triggers.

Moody's has downgraded the NIM securitization based upon performance of the underlying deals that has negatively impacted future residual payments to the NIM holders. Because of greater than expected delinquencies the excess cashflow paid to the NIM by the underlying deal, Structured Asset Securities Corp. 2003-12XS, has been consistently lower than originally anticipated and could continue to diminish going forward.

Complete rating actions is:

Issuer: SASCO Net Interest Margin Trust 2003-12XS

Downgrade:

* Class A, Previously: Baa1, Downgraded to Ba2

SOLUTIA INC: Has Until August 15 to Make Lease-Related Decisions----------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New York extended the deadline for Solutia, Inc., and its debtor-affiliates to assume, assume and assign or reject unexpired leases and executory contracts to August 15, 2005.

Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,relates that at this juncture in the Debtors' complexreorganization cases, deemed rejection of the Unexpired Leaseswould harm the Debtors' estates by causing them to lose UnexpiredLeases that may be essential to their business operations andreorganization. On the other hand, Mr. Cieri says, assuming allof the Unexpired Leases outside of a Chapter 11 plan could forcethe Debtors to assume certain Unexpired Leases that ultimatelymay not be beneficial to the Debtors' estates and, in thatregard, require the Debtors to cure significant prepetitiondefaults, thereby elevating prepetition claims of landlords toadministrative expense status.

The Unexpired Leases pertain to wide-ranging segments of theDebtors' business operations. According to Mr. Cieri, theDebtors need more time to evaluate the Unexpired Leases tocarefully review their benefits and burdens.

SOLUTIA INC: JP Morgan Wants Adversary Complaint Filed Under Seal-----------------------------------------------------------------JP Morgan Chase Bank, National Association, as Indenture Trustee,asks U.S. Bankruptcy Court for the Southern District of New York to allow it to file under seal its adversary complaint against Solutia, Inc., pursuant to the terms of a confidentiality stipulation. In the alternative, JP Morgan seeks the Court's permission to file its adversary complaint against the Debtor without a seal.

Eric A. Schaffer, Esq., at Reed Smith, LLP, in New York, remindsthe Court that it expressly preserved JP Morgan's right to pursueclaims arising out of the Debtor's attempt to strip JP Morgan'ssecurity interests in the Debtor's assets.

A year ago, the Court permitted JP Morgan to examine Solutia,Inc., and request production of documents pursuant to Rule 2004of the Federal Rules of Bankruptcy Procedure.

Based on its Rule 2004 examination, JP Morgan has determined thatcertain causes of action exist against Solutia, Inc.

According to Mr. Schaffer, JP Morgan has prepared a complaintagainst the Debtor based, in part, on documents that the Debtorhas marked as "Confidential". Pursuant to the terms of theconfidentiality stipulation, JP Morgan is constrained from using"Confidential Discovery Material" for litigation purposes withoutprior written consent from Solutia or obtaining a Court order.

Mr. Schaffer tells the Court that JP Morgan asked for Solutia'spermission to file its adversary complaint without a seal, butSolutia refused.

Headquartered in St. Louis, Missouri, Solutia, Inc. --http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in abroad range of consumer and industrial applications. The Companyfiled for chapter 11 protection on December 17, 2003 (Bankr.S.D.N.Y. Case No. 03-17949). When the Debtors filed forprotection from their creditors, they listed $2,854,000,000 inassets and $3,223,000,000 in debts. Solutia is represented byConor D. Reilly, Esq., and Richard M. Cieri, Esq., at Gibson, Dunn& Crutcher, LLP. (Solutia Bankruptcy News, Issue No. 38;Bankruptcy Creditors' Service, Inc., 215/945-7000)

SONITROL CORP: S&P Rates Proposed $135 Mil. Sr. Sec. Facility at B------------------------------------------------------------------Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Berwyn, Penn.-based Sonitrol Corporation. At the same time, Standard & Poor's assigned its 'B' rating, with a recovery rating of '3', to Sonitrol's proposed $135 million senior secured bank facility, which will consist of a $40 million undrawn revolving credit facility and a $95 million term loan, both due in 2010. The bank loan rating, which is the same as the corporate credit rating, along with the recovery rating, reflect S&P's expectation of meaningful (50% to 80%) recovery of principal by creditors in the event of a default or bankruptcy. The proceeds from this facility will be used to refinance existing debt and fund a sponsor dividend. The outlook is stable.

With annual revenues of approximately $80 million, Sonitrol is a second-tier provider of alarm monitoring equipment and services, providing sales, installation, and maintenance of security alarm systems to approximately 39,000 commercial customers (approximately 125,000 including all franchisees). There are 137 Sonitrol franchise territories and 50 corporate-owned territories serving 93 of the top 100 U.S. markets. The company's growth strategy revolves around developing the existing business base, in addition to acquiring additional franchisees. Pro forma for the proposed bank facility, Sonitrol had approximately $100 million in operating lease-adjusted debt as of March 2005.

Standard & Poor's expects to resolve the CreditWatch listing after a review of the company's decision on its course of action, including potential changes in governance, strategic direction, financial profile, or other credit metrics, and their ultimate impact on credit quality.

SPIEGEL INC: Taps Houlihan Lokey as Trademark Valuation Servicer----------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New York gave Spiegel, Inc., and its debtor-affiliates permission to employ Houlihan Lokey Howard & Zukin Financial Advisors, Inc., as their trademark and trade name valuation servicer.

Houlihan Lokey is a specialty investment banking firm providing valuation, financial restructuring, and investment banking services and has operated throughout the United States since 1970. Marc B. Hankin, Esq., at Shearman & Sterling LLP, in New York, tells the Court that Houlihan Lokey has one of the most active financial restructuring groups in the nation and has provided financial advisory services to debtors, bondholders, committees, and other entities in numerous Chapter 11 cases.

The Debtors contend that the valuation analysis to be performed by Houlihan Lokey is an essential step in obtaining their Senior Debt Facility contemplated by the Plan.

The Debtors intend to pay Houlihan Lokey a $65,000 fixed fee for the preparation of the Report. The Debtors propose to pay $30,000 on approval of the employment and the balance on the submission of periodic billings from the firm.

The Debtors also obtained the Court's authority to reimburse Houlihan Lokey for all necessary out-of-pocket expenses incurred in preparation of the Report and the reasonable fees and expenses of legal counsel retained by the firm. The Debtors expect those expenses to be reasonably modest. For any legal fees and expenses in excess of $10,000, Houlihan Lokey will obtain and provide the Court with time records of its legal counsel in support of those fees and expenses.

Gary Finger, Houlihan Lokey's director, attests that the firm does not hold or represent any interest adverse to the Debtors' estates and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, homefurnishings and other merchandise through catalogs, e-commercesites and approximately 560 retail stores. The Company filed forChapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,at Shearman & Sterling, represent the Debtors in theirrestructuring efforts. When the Company filed for protection fromits creditors, it listed $1,737,474,862 in assets and$1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 44;Bankruptcy Creditors' Service, Inc., 215/945-7000)

SPIEGEL INC: Bankgeselleschaft Seeks Clarification of Amended Plan------------------------------------------------------------------Spiegel, Inc., and its debtor-affiliates filed an amendment totheir Joint Plan of Reorganization and Disclosure Statement toprovide clarification and additional information on March 28, 2005. The Debtors also amended the Plan to reflect changes made since the Plan and the Disclosure Statement were filed with the Court on February 18, 2005. The Debtors included in the Plan adetailed process for providing notice of their intention toassume executory contracts and unexpired leases and determine andresolve related cure payments.

Bankgeselleschaft Berlin AG asserted claims in excess of $75 million against Spiegel, Inc., and its debtor-affiliates on account of amounts due and owing to it under:

-- bilateral loan agreements and a swap transaction entered into with the Debtors before the Petition Date; and

-- certain syndicated loan facilities.

Bankgeselleschaft has entered into agreements pertaining to the sale of all its claims against the Debtors.

Under the Debtors' Plan, Class 4 holders of general unsecured claims will receive Eddie Bauer Holdings Common Stock, cash, and other consideration in respect of their claims against the Debtors. Section 7.12(b) of the Debtors' Plan imposes certain restrictions on any entity owning "on the Effective Date, 4.75% or more of the Eddie Bauer Holdings Equity."

Ken Coleman, Esq., at Allen & Overy LLP, in New York, informs the Court that the Debtors' Plan appears to be silent on the amount of claims that will equate to 4.75% of Eddie Bauer Holdings Equity. However, the ballot distributed by the Debtors' balloting agent asks creditors to indicate whether they hold more than $60,944,000 in Class 4 claims. Evidently, Mr. Coleman says, owning that amount of claims will trigger the proposed restrictions.

Against this backdrop, Bankgeselleschaft wants the Court to clarify that it will not be considered a restricted entity and should not be considered one. As of the Plan's Effective Date, Mr. Coleman maintains that Bankgeselleschaft will not own 4.75% or more of the Eddie Bauer Holdings Equity.

Bankgeselleschaft also seeks clarification that ownership of claims against the Debtors -- with respect to which transfer notices pursuant to Rule 3001(e) of the Federal Rule of Bankruptcy Procedure have been filed with the Court on or prior to the distribution record date -- will not be attributed to it for the purpose of determining the amount of Eddie Bauer Holdings Common Stock that it will receive pursuant to the Debtors' Amended Plan.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, homefurnishings and other merchandise through catalogs, e-commercesites and approximately 560 retail stores. The Company filed forChapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,at Shearman & Sterling, represent the Debtors in theirrestructuring efforts. When the Company filed for protection fromits creditors, it listed $1,737,474,862 in assets and$1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 44;Bankruptcy Creditors' Service, Inc., 215/945-7000)

SPIEGEL INC: Asks Court to Establish Disputed Claims Reserve ------------------------------------------------------------With more than 4,200 claims being filed as of May 13, 2005, Spiegel, Inc., and its debtor-affiliates tell Judge Lifland of the United States Bankruptcy Court for the Southern District of New York that they have spent considerable time and effort reviewing and reconciling the claims and the asserted liabilities as reflected in their books and records. The Debtors want to make the largest initial distribution possible to general unsecured creditors on the Effective Date of their First Amended Joint Plan of Reorganization.

To date, the Debtors have filed 36 omnibus claim objections and several individual claim objections seeking to modify or expunge more than 2,500 proofs of claim. Andrew V. Tenzer, Esq., at Shearman & Sterling LLP, in New York, tells the Court that the Debtors and their professionals have succeeded in resolving dozens of disputed claims.

Mr. Tenzer relates that, based on their claims analysis to date, the Debtors have determined that certain of the outstanding claims that have been asserted against them constitute legitimate obligations in the amounts stated on the proofs of claim or as agreed on by the parties. The Debtors believe that those claims should be allowed, while others, with respect to which they believe that a valid basis for objection exists, should not be allowed at this time.

With respect to the objectionable group of claims, the Debtors want those claims estimated for purposes of limiting their maximum liability and to establish the appropriate reserve amounts for making distributions on account of the claims if and when they become allowed. The Debtors seek to set the reserve amount at zero, to the extent that those claims will be allowed as of the Effective Date, or at the settled amount of each claim.

Mr. Tenzer states that as the Plan's Effective Date is expected to occur shortly, those claims need to be addressed to set an appropriate cap for purposes of determining the amount of the Disputed Claims Reserve and to permit a prompt distribution to holders of Class 4 Claims, who are entitled to a pro rata share of the Eddie Bauer Holdings Common Stock and Cash available for distribution pursuant to the Debtors' Plan.

The Debtors' Amended Plan classifies General Unsecured Claims in Class 4 and Convenience Claims in Class 5. Under the Debtors' Amended Plan, if any claim is a disputed claim or an unresolved claim, no distribution will be made on account of that claim unless and until that claim becomes allowed. Under the Plan, on the date of the Initial Distribution, Eddie Bauer Holdings, Inc., will transfer to the Creditor Trust a reserve for the holders of all Disputed or Unresolved Claims other than Administrative Claims.

The Disputed Claims Reserve will consist of:

(i) the property that otherwise would be distributable to the holder of each Disputed or Unresolved Claim in accordance with the Plan if that Claim were an Allowed Claim, in the face amount asserted;

(ii) other amount as ordered by the Court; or

(iii) other property as the holder and the Debtors or the Creditor Trust agree.

The Debtors' Amended Plan further provides that, to the extent a Disputed Claim or Unresolved Claim other than an Administrative Claim becomes allowed, the Creditor Trust will make a Distribution to the holder of that claim from the Disputed Claims Reserve.

Thus, the Debtors ask the Court to establish the amount of the Disputed Claims to determine the property amount that will be held in the Disputed Claims Reserve. To the extent a prepetition claim is a Disputed Claim or an Unresolved Claim, the property to be held by the Disputed Claims Reserve on the date of the Initial Distribution will equal that property which would otherwise be distributable in respect of that Claim if that were allowed in its full face amount.

Mr. Tenzer explains that the establishment of a Disputed Claims Reserve is part of a plan confirmation process and should not be interpreted by creditors as the Debtors' admission of liability or acknowledgement of the validity of a claim. The amounts established for the Disputed Claims Reserve are extremely conservative and represent the absolute maximum claim exposure estimated by the Debtors.

The Debtors believe that numerous claims, grouped in seven categories, will be allowed at a fraction of their face value, if at all:

A. 60 Disputed Claims

The Debtors maintain that 60 Disputed Claims, totaling $3,868,621, ultimately will be disallowed in full or will be allowed in a fraction of the amount stated on the proofs of claim. The Debtors believe that the 60 Disputed Claims may not be valid and enforceable obligations of the estate, or the claims may be their obligations, but in amounts lower than those asserted on the proofs of claim.

The Debtors submit that (i) no reserve should be established for the 60 Disputed Claims or (ii) an amount lower than the face amounts of the claims should be reserved.

B. Insurance Claims

The Debtors propose to reserve these amounts for seven Insurance Claims, aggregating $5,471,353:

The Debtors explain that the Insurance Claims are disputed claims covered by their insurance policies and are subject to relevant deductibles or self-insured retentions under those policies. The reserved amounts represent the deductible or self-insured retention applicable to each claim.

C. Lease Claims

The Debtors reviewed their books and records to determine the maximum amount of rejection damages to which the counter-parties to the rejected leases and contracts may be entitled. To determine the total amount of the Disputed Claims Reserve, the Debtors ask Judge Lifland that the rejection damages claims of five potential claimants should be reserved in, and limited to, these amounts:

The Debtors disclose that 24 disputed claims represent claims that have either been:

-- substantiated by, among other things, the Debtors' books and records and by the evidence presented by the creditors in support of their claim; or

-- agreed to pursuant to a settlement or compromise between the Debtors and claimants.

The Debtors anticipate that the Zero Reserve Resolve Claims, amounting to $62,719,284, and which have been settled for $2,548,596, will be allowed as of the Effective Date pursuant to Court orders. Accordingly, the Debtors insist that no reserve should be established for the Zero Reserve Resolved Claims. However, in the event that, as of the Effective Date, no order has been entered by the Court allowing any Zero Reserve Resolved Claim, the Zero Reserve Resolved Claim would be included in its corresponding settled amount.

E. Post-Effective Date Resolved Claims

The Debtors believe that 18 claims, aggregating $7,114,283, are valid obligations of the estate. The disputed claims represent claims that have either been substantiated by, among other things, the Debtors' own books and records and by the evidence presented by the creditors in support of their claim, or that have been agreed to pursuant to a settlement or compromise between the Debtors and the claimants but that will not become allowed claims prior to the Effective Date. For purposes of calculating the impact on the Disputed Claims Reserve, the Debtors will reserve $3,659,912 for the Resolved Claims.

F. Bond Claims

The Debtors inform the Court that 50 disputed claims, aggregating $36,164,292, have been filed against them by the issuers of various surety bonds as either contingent and unliquidated claims, or liquidated claims for amounts drawn on the bonds before the Petition Date.

By the evidence presented by the Bond Claimants in support of their claims, the Debtors agree with certain of the liquidated amounts asserted in the Bond Claims. In addition, the Debtors have reached agreement with the Bond Claimants with respect to the treatment of the contingent Bond Claims. The Debtors agree that certain of the surety bonds will be assumed by Eddie Bauer Holdings under the Plan, and the contingent Bond Claims will be withdrawn. The Debtors believe that their maximum liability with respect to the Bond Claims should be limited to $76,825.

G. Disputed Claims -- Zero Reserves

The Debtors believe that they will have no liability to around 300 disputed claims because those claims are the subject of omnibus objections that will likely result in expungement based on proposed treatment under the Plan.

The Zero Liability Disputed Claims, totaling $14,168,544, include:

* claims filed by current and former employees of the Debtors and the Pension Benefits Guaranty Corporation with respect to the Debtors' various benefits programs, which are to be assumed by Eddie Bauer Holdings pursuant to the Plan; and

* claims of certain of the Debtors' current and former directors and officers seeking indemnification by the Debtors, which claims are to be assumed by Eddie Bauer Holdings pursuant to the Plan.

The Debtors contend that the establishment of a reserve for the Zero Liability Disputed Claims is unnecessary and would unduly decrease the initial distributions to holders of Allowed Class 4 Claims.

Although no guarantee can be given that the disputed claims ultimately will be allowed in amounts lower than those amounts reserved for those claims, the Debtors assure the Court that the Disputed Claims Reserve is more than sufficient, in the aggregate, to ensure that holders of claims that will not be allowed as of the Effective Date but whose claims may subsequently become allowed will receive their pro-rata share of the cash and shares of Eddie Bauer Holdings Common Stock to be distributed to the Class 4 Claimholders.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, homefurnishings and other merchandise through catalogs, e-commercesites and approximately 560 retail stores. The Company filed forChapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,at Shearman & Sterling, represent the Debtors in theirrestructuring efforts. When the Company filed for protection fromits creditors, it listed $1,737,474,862 in assets and$1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 45;Bankruptcy Creditors' Service, Inc., 215/945-7000)

STATEN ISLAND: Fitch Downgrades $49 Million Bonds to B from BB----------------------------------------------------------------Fitch Ratings has downgraded the rating on $49 million of Staten Island University Hospital's bonds to 'B' from 'BB-'. The bonds have been removed from Rating Watch Negative, and the Rating Outlook is Negative.

The rating downgrade is due to the finalization of a settlement between Staten Island University Hospital and the New York State Attorney General's office regarding Medicaid overpayments of various clinic operations. The final settlement amount totals $76.5 million, and the repayment terms include an upfront payment of $20 million and the remainder being paid over 13 years.

Of the $20 million upfront payment, $8 million has already been recouped by the state through Medicaid reimbursement withhold. Management does not expect the settlement terms to cause any violations of the bond covenants. Days cash on hand at March 31, 2005, was 32.7 days excluding the $12 million upfront payment. Management indicated that the state will continue to withhold Medicaid reimbursement for the remainder of 2005 to cover the $12 million upfront payment. Fitch notes that SIUH's days cash on hand at March 31, 2005, would be 24.6 days if the $12 million were paid immediately. Any shortfalls in this payment at the end of the year would result in a lump sum payment, which would negatively affect SIUH's already weak liquidity measures.

SIUH's annual obligations include approximately $23 million in debt service payments, $2 million (one year over 20 years) related to a previous settlement with the AG, and approximately $5 million (one year over 13 years) related to the most recent settlement with the AG. Including the settlements, debt service coverage by EBITDA was 1.4 times for fiscal 2004. Fitch will continue to monitor SIUH's operational performance, which should improve due to implemented initiatives including employee reductions, consolidation of services, and revenue cycle improvements.

The Rating Outlook is Negative due to the ongoing investigation by the Office of the Inspector General relating to graduate medical education reimbursement and other federal issues. The OIG investigation may last several years, and the potential size of the settlement is unknown.

Credit positives remain SIUH's strong market share and affiliation with North Shore Long Island Jewish Health System. SIUH maintains a leading market share of approximately 59%, which has increased from three years ago. Fitch values SIUH's affiliation with NSLIJ (rated 'A-' by Fitch) highly and believes the affiliation is beneficial for both parties. NSLIJ lends significant resources in terms of managed care contracting, joint planning, group purchasing, and insurance. In light of current regulatory issues, Fitch views the affiliation as an important credit strength as NSLIJ's management team has been more involved in assisting the organization. There has been no monetary support from NSLIJ to SIUH.

Fitch will continue to monitor the outcome of the OIG investigation and determine the impact of the settlement on SIUH's rating.

SIUH is a 686-staffed bed hospital with three campuses located in Staten Island, NY. SIUH had total operating revenue of $585 million in fiscal 2004. SIUH covenants to provide quarterly disclosure to Fitch and bondholders. Disclosure to Fitch includes quarterly statements including a balance sheet, income statement and utilization statistics, and annual audited financials.

These outstanding debts are rated by Fitch:

-- $17,200,000 New York City Industrial Development Agency civic facility revenue bonds, (Staten Island University Hospital Project), series 2002C;

-- $12,160,000 New York City Industrial Development Agency civic facility revenue bonds, (Staten Island University Hospital Project), series 2001A;

-- $20,000,000 New York City Industrial Development Agency civic facility revenue bonds, (Staten Island University Hospital Project), series 2001B.

STRUCTURED MORTGAGE: Moody's Downgrades Class C Cert. to Caa3-------------------------------------------------------------Moody's Investors Service has downgraded one class of certificates issued by Structured Mortgage Trust, 1997-1 while confirming the rating of another class. The transaction is a resecuritization backed by other residential mortgage backed securities.

Moody's has downgraded the Class C certificates because of the weak performance of the underlying securities and the deterioration of all credit enhancement originally available to this class. Despite historical and cumulative losses exceeding original expectations, Moody's has determined that the Class B certificates continue to embody a Ba2 credit rating based upon currently available credit enhancement relative to expected future losses.

"The downgrade and negative outlook reflect Sun Coast's restated 2003 income statement, which was substantially weaker than the original 2003 audited income statement," said Standard & Poor's credit analyst Cynthia Keller Macdonald.

In addition, the rating and outlook reflect a loss in 2004 that was far more than the estimates provided during the last rating review.

In 2004, Sun Coast posted a $2.5 million loss from operations (a negative 3.71% operating margin) and restated 2003's operating results from $496,000 to negative $661,000 due to a change in the elimination entries for Sun Coast's captive insurance company.

Sun Coast's financial position is firmly noninvestment grade and more representative of a 'B' rating category credit, given its significant losses, light liquidity, and competitive marketplace. However, a lower rating is precluded by the support of the 'BBB' rated University Community Hospital. University Community Hospital has historically provided cash to support operations and is contractually required to transfer sufficient funds to generate 1.25x coverage on Sun Coast's $23.4 million outstanding series 1993 revenue bonds. This support is capped at a total of $10 million, of which $2 million has already been transferred from University Community Hospital.

Sun Coast is a 300-bed osteopathic hospital located in Largo and is affiliated with University Community Hospital and Helen Ellis Memorial Hospital. It entered into a long-term affiliation agreement with University Community Hospital in 2001. However, Sun Coast's financial results are not consolidated with those of University Community Hospital and Sun Coast remains solely obligated on its debt. The agreement may be terminated under the documents, but termination is not anticipated. Therefore, Standard & Poor's factors in the commitment of University Community Hospital to Sun Coast, but the rating on Sun Coast's debt largely remains based on its own financial and operating performance.

Liquidity may possibly drop further as Sun Coast has additional capital needs that will strain liquidity. Management proposes to expand the emergency department at a total cost of $3.3 million, which is expected to be financed from internal cash flow and a capital campaign. In addition, an aggressive physician recruitment effort is underway.

SYRATECH CORPORATION: Moody's Withdraws Three Junk Ratings ----------------------------------------------------------Moody's Investors Service has withdrawn the ratings of Syratech Corporation because the company is in bankruptcy proceedings. As of December 2004, the company had $118 million of rated debt on its balance sheet.

TELEGRAPH PROPERTIES: Sells Real Estate to W. Randolph for $10MM---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Chicago Division, approved Telegraph Properties LP's request to sell its personal and real property, free and clear of liens and interests, to 188 W. Randolph, LLC. The Court approved the sale transaction on May 17, 2005.

The Debtor and 188 W. Randolph entered into an Asset Purchase and Sale Agreement on April 11, 2005, calling for the sale of the Debtor's real property located at 188 West Randolph Street, Chicago, Illinois, to 188 W. Randolph for $10 million. That real property, which is the Debtor's only substantial tangible asset, includes a 46-story commercial building.

The Debtor will assume and assign appropriate executory contracts and unexpired leases to 188 W. Randolph.

The Debtor tells the Court that the Sale Agreement is the product of substantial and lengthy good faith negotiations with 188 W. Randolph.

On April 21, 2005, the Court approved the sale terms and competitive bidding procedures calling for the payment of a $300,000 Break-Up Fee in the event a higher bid came forward at an auction. The Debtor held an auction on May 11, 2005. No competitor topped 188 W. Randolph's bid.

The Court orders that not withstanding the entry of its final Sale Order, any issue regarding the amount and disposition of the broker's commission on the sale of the Debtor's real property as provided in the Sale Agreement will be resolved by the Court at a hearing to be held at 11:00 a.m., on June 9, 2005.

Headquartered in Chicago, Illinois, Telegraph Properties LP, akaC/O RN Realty LP, owns, operates and leases commercial space of a 46-story commercial building located at 188 West Randolph Street, Chicago, Illinois. The Company filed for chapter 11 protection on June 24, 2002 (Bankr. N.D. Ill. Case No. 02-24261). Allen J. Guon, Esq., at Shaw, Gussis, Fishman, Glantz, Wolfson & Towbin LLC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $19,188,928.85 in total assets and $11,996,649.28 in total debts.

TORCH OFFSHORE: Walks Away from Eight Contracts & Leases -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana gave Torch Offshore, Inc., and its debtor-affiliates permission to reject certain executory contracts and unexpired leases, nunc pro tunc to March 31, 2005.

The Debtors determined that rejection of these four leases will benefit the Debtors' estate:

The Court also approved the rejection of three cellular phone agreements with Cingular Wireless, d/b/a AT&T Wireess, and a letter agreement with Morgan Keegan & Company, Inc.

Following the rejection of the Houston Lease, the Court also authorized the sale of the Houston office's furniture to Repeat Consignment Superstore for a price not more than $10,000. Proceeds from the office furniture sale will be used to pay down and reduce Regions Bank's secured prepetition claim under a Working Capital Facility dated July 19, 2002.

Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides integrated pipeline installation, sub-sea construction and support services to the offshore oil and gas industry, primarily in the Gulf of Mexico. The Company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on Jan. 7, 2005. Jan Marie Hayden, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., and Lawrence A. Larose, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $201,692,648 in total assets and $145,355,898 in total debts.

This action follows the announcement that TransWestern has signed a definitive agreement with Yell Finance BV, whereby Yell will acquire TransWestern in a transaction valued at approximately $1,575 million.

The review will assess the likelihood that the proposed acquisition be endorsed by Yell shareholders, receive regulatory approval and close in accordance with the terms of the agreement.

Moody's expects to withdraw all ratings of TransWestern following the completion of the proposed acquisition and the retirement of all outstanding TransWestern debt.

Headquartered in San Diego, California, TransWestern Publishing publishes 330 directories in 25 states. In 2004, the company reported revenues of $358 million.

TRIAD HOSPITALS: Moody's Rates New $1.1 Billion Facilities at Ba2-----------------------------------------------------------------Moody's Investors Service today assigned a rating of Ba2 to Triad's $1,100 million senior secured credit facilities, consisting of a $600 million revolving credit facility and a $500 million Term Loan A. Moody's also affirmed the company's senior implied rating at Ba3 and the ratings of the company's senior notes (B2) and senior subordinated notes (B3). Proceeds of the new facilities will be used to repay amounts outstanding on the existing facilities and fund near-term capital expenditures.

* Senior secured revolver due 2007 (guaranteed), Ba2 (to be withdrawn on the closing of the proposed facilities)

* Term loan A due 2007 (guaranteed), Ba2 (to be withdrawn on the closing of the proposed facilities)

* Term loan B due 2008 (guaranteed), Ba2 (to be withdrawn on the closing of the proposed facilities)

The ratings outlook is stable.

The ratings reflect the company's moderately high leverage and the significant capital requirements for the company's expansion projects, de novo development and potential acquisitions, which may result in an increase in leverage in the near-term.

Additionally, the ratings consider the fact that the company's strategy of growth through joint venture agreements might present less financial flexibility than acquisitions as capital expenditures are committed to in advance. The ratings also recognize the industry-wide margin pressure stemming from:

Moody's also notes the competitive nature of the industry and the increasing threat hospital operators are facing from surgery centers and specialty hospitals that are competing for higher margin procedures.

* the company's generally good market share in each individual market; and

* favorable demographic trends.

Moody's also affirmed Triad's speculative grade liquidity rating of SGL-3. The SGL-3 rating reflects our expectation that Triad will maintain adequate liquidity over the next twelve months. Moody's expects Triad to draw on the new $600 million revolving credit facility to fund expansions, acquisitions and de novo development as internally generated free cash flow will not be sufficient.

However, taking into account cash flow from operations, access to the revolver, and cash on the balance sheet, the company will have sufficient liquidity over the next twelve months. Moody's also believes Triad will maintain an adequate cushion against the financial covenants in the company's new credit facility, which include maximum senior leverage and maximum leverage ratios and a minimum interest coverage ratio. Moody's notes that both the liquidity and long-term ratings could be downgraded if Triad funds growth through leverage levels in excess of projected amounts. Taking into account capital expenditures for maintenance, internal expansion, de novo developments, joint venture projects, and acquisitions, Moody's estimates that adjusted free cash flow to adjusted debt will peak at approximately -15% for the year ending December 31, 2005 and approximate -12% for the next four quarters ending June 30, 2006.

The stable outlook anticipates that Triad will be able to maintain its current level of profitability and cash flow. Moody's expects the company to continue to generate good revenue growth through the expansion of facilities and services, de novo development, joint ventures and acquisitions as well as modest rate increases.

Moody's does not foresee upward pressure on the ratings given the expectation that the company will have negative free cash flow and will fund expansion through additional drawdowns on its revolver. Unless the company significantly reduces debt or curtails its planned growth initiatives so that free cash flow can be used to reduce indebtedness, the ratings would not likely be upgraded.

Moody's would consider a downgrade of the ratings if the company could not sustain a level of adjusted cash flow from operations to adjusted debt of at least 15%. Margin deterioration due to reductions in volumes or increases in operating expenses, especially bad debt expense and labor costs, could contribute to a decrease in cash flow from operations. Additionally, if the company were to engage in a higher-than-expected level of expansion or acquisition activity, leading to a greater than expected increase in leverage, Moody's would consider downgrading the rating.

The ratings on the $1,100 million credit facilities are notched one level above the senior implied rating in recognition of the collateral protection provided. Triad's $600 million 7% senior notes due 2012 (not guaranteed), rated B2, are notched two levels below the senior implied to reflect the effective subordination to the bank debt and the structural subordination to the credit facilities and the liabilities of the operating subsidiaries. The company's $600 million 7% senior subordinated notes due 2013 (not guaranteed), rated B3, are notched three levels below the senior implied rating to reflect the contractual, effective and structural subordination to all of the company's other debt and subsidiary obligations.

For the twelve month period ended March 31, 2005, pro forma for the proposed credit facilities, Triad's ratio of adjusted cash flow from operations to adjusted debt would have been approximately 20%, which is moderate for the Ba3 category. However, free cash flow coverage of debt would have been weak at 2.0% due to a high level of capital expenditures for facility expansions and de novo development (1.3% after taking into account acquisitions). Interest coverage, as measured by the ratio of EBIT to interest, would have been 3.7 times, while the ratio of adjusted debt to EBITDAR would have been 3.6 times.

Triad Hospitals, Inc., through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets. Triad currently has 53 hospitals and 9 ambulatory surgery centers in 15 states with approximately 8,690 licensed beds.

In addition, through its QHR subsidiary, Triad provides hospital management, consulting and advisory services to more than 200 independent community hospitals and health systems throughout the U.S. Triad recognized revenue of $4.6 billion for the twelve months ended March 31, 2005.

TRICN INC: MOSAID Tech to Acquire Assets in $3.1 Million Deal-------------------------------------------------------------MOSAID Technologies Incorporated (TSX:MSD) signed a non-binding letter of intent to acquire substantially all of the assets of TriCN, Inc., for a purchase price of $3.1 million. MOSAID has also offered to pay up to $900,000 based on the achievement of certain performance objectives. TriCN filed for protection under Chapter 11 of the United States Bankruptcy Code on December 30, 2004.

"TriCN's silicon proven I/O libraries complement MOSAID's memory controllers," said Peter Gillingham, Vice President and General Manager of MOSAID's Intellectual Property Division. "With the combined Ottawa and San Francisco operations we will be able to offer an extensive I/O product line and a complete memory controller solution."

"We look forward to successfully completing this transaction with TriCN," said George Cwynar, President and Chief Executive Officer for MOSAID. "With revenues exceeding $3 million in each of its last two years of operations, TriCN has a solid reputation and an extensive customer base that can be leveraged with MOSAID's product line and financial strength."

MOSAID's offer remains subject to a variety of conditions, including satisfactory due diligence, the absence of any material adverse change to the business, the approval of MOSAID's Board and any necessary regulatory and other approvals including that of the United States Bankruptcy Court for the Northern District of California. There can be no assurance that the transaction will be completed as proposed or at all.

About MOSAID Technologies Incorporated

MOSAID Technologies Incorporated -- http://www.mosaid.com/-- makes memory better through the development and licensing of intellectual property and the supply of memory test and analysis systems to semiconductor manufacturers, foundries and fabless semiconductor companies around the world. Founded in 1975, MOSAID is based in Ottawa, Ontario, Canada, with offices in Santa Clara, California; Newcastle upon Tyne, U.K; and Tokyo, Japan.

Headquartered in San Francisco, California, TriCN, Inc., is a leading developer of high-performance semiconductor interface intellectual property (IP) products. The Company filed for chapter 11 protection on December 30, 2004 (Bankr. N.D. Calif. Case No. 04-33651). Eric A. Nyberg, Esq., at Kornfield,Paul and Nyberg represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $10 million.

TROPICAL SPORTSWEAR: United States Trustee Objects to Plan----------------------------------------------------------The U.S. Trustee for Region 21 asks the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, not to confirm the Amended Joint Chapter 11 Plan filed by Tropical Sportswear International Corp.

The U.S. Trustee states that because the Debtors' plan calls for a complete liquidation and creditors are not paid in full, releases and exculpations from liability will in no way assist rehabilitation. Also, the U.S. Trustee adds, the Plan doesn't have a clear mechanism to insure payment of the quarterly fees to the U.S. Trustee.

The U.S. Trustee urges the Court to reject the Plan or have it modified to correct the improper provisions.

Full-text copies of the Disclosure Statement and Plan areavailable for a fee at:

Headquartered in Tampa, Florida, Tropical Sportswear Int'l Corp.-- http://www.savane.com/-- designs, produces and markets branded branded apparel products that are sold to major retailers in all levels and channels of distribution. The Company and itsdebtor-affiliates filed for chapter 11 protection on Dec. 16, 2004 (Bankr. M.D. Fla. Case No. 04-24134). David E. Bane, Esq., and Denise D. Dell-Powell, Esq., at Akerman Senterfitt, represent the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $247,129,867 and total debts of $142,082,756.

UAL CORP: Court Extends Exclusive Right to File Plan Until July 1-----------------------------------------------------------------The Hon. Eugene Wedoff extended UAL Corporation and its debtor-affiliates' exclusive periods to file a plan through July 1, 2005, and to solicit acceptances of that plan through September 1, 2005.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,Illinois, tells the Court that, over the last several months, theDebtors have implemented many components of a business plan thatsatisfies the metrics required for exit financing. This task hasbeen made more difficult by unrelenting revenue challenges andincreasing fuel prices.

Central to the restructuring process is the Debtors' effort tosecure exit financing. The Debtors have received preliminaryproposals for $2,000,000,000 to $2,500,000,000 in exit financingfrom four institutions. The Debtors' management met separatelywith each of these potential financiers in January 2005. InFebruary, the four institutions met with the exit financingsubcommittee of the Creditors' Working Group to present anddiscuss their proposals. Each proposal is contingent on theDebtors achieving the savings identified in the business plan.

To implement the business plan and obtain exit financing, theDebtors must conclude the Section 1113 and pension process,complete the Section 1110 process, restructure the United Expressoperations, implement the streamlined cost structure and developa plan of reorganization that includes the business plan and therestructuring initiatives.

An extension of the Exclusive Periods will enable the Debtors tocontinue their hard work and implement many restructuringinitiatives, while creating a stable working environment throughthe mid-May pension trial. Once the Court decides the Section1113 and pension matters, the Debtors can incorporate the factsand circumstances in requesting a further extension of theExclusive Periods to obtain exit financing and formulate, proposeand seek confirmation of a plan of reorganization.

UAL CORP: Asks for Prelim. Injunction Against Port of Portland--------------------------------------------------------------According to Marc Kieselstein, Esq., at Kirkland & Ellis, in Chicago, Illinois, the Port of Portland, a port district of the State of Oregon, is refusing to enter into a new lease for the Portland International Airport unless and until UAL Corporation and its debtor-affiliates assume the soon-to-be expired existing lease and pay Portland's prepetition claims as cure claims.

The Debtors have been operating at the PIA for over 30 years. The Debtors operate approximately 7,200 flights into and out of PIA every year. In 2004, the Debtors paid approximately $14,000,000 in rent and landing fees to the PIA under the Lease. The Debtors' existing Lease with the PIA expires on June 30, 2005. The Debtors are current on all postpetition rent obligations to the PIA, with $1,200,000 in unpaid prepetition claims under the Lease.

To maintain uninterrupted operations at the PIA, the Debtors must enter into a new lease with Portland. Several months ago the parties entered into discussions over a new lease. Portland proposed a lease that was substantially similar to leases with other air carriers, but contained terms that were discriminatory against bankrupt air carriers. Specifically, Portland demanded that the Debtors post a $4,700,000 security deposit and that the Debtors waive participation in revenue sharing until they pay their prepetition claims. Other non-bankrupt carriers are not required to meet these terms.

Mr. Kieselstein says Portland acknowledged that the Debtors were asked to meet these terms because they are in bankruptcy, have not assumed the PIA Lease, and have not paid the prepetition claims.

Mr. Kieselstein asserts that Portland may not condition or deny the Debtors the right to lease premises at PIA based on their status as a Chapter 11 debtor. PIA may also not discriminate against the Debtors due to the outstanding prepetition general unsecured obligations owed to Portland under the Lease. Portland's proposed terms constitute an action to collect on a prepetition claim in violation of the automatic stay. Without injunctive relief, the Debtors will be wrongfully precluded from access to PIA. Also, the Debtors will be forced to choose between a long-term discriminating above-market lease or reducing or shutting down operations at PIA. The Court should not allow Portland to "flagrantly" discriminate against the Debtors by proposing new lease terms that are economically punishing.

Debtors Want Preliminary Injunction

The Debtors ask the Court to prevent the Port of Portland from denying or conditioning access to the Portland International Airport. Portland has proposed a new lease that discriminates against the Debtors due to their status in Chapter 11 and the existence of unpaid prepetition obligations. To protect them from potentially discriminating conduct, the Debtors ask Judge Wedoff to grant a preliminary injunction.

Portland's attempt to condition a new lease upon the Debtors' bankruptcy and current inability to pay the prepetition obligations is "a blatant and willful" violation of Sections 362 and 525 of the Bankruptcy Code, Marc Kieselstein, Esq., at Kirkland & Ellis, in Chicago, Illinois, states. A governmental unit may not deny or condition access to a facility due to a debt that is dischargeable. Portland's conditioning of the Debtors' lease on a security deposit and payment of prepetition rents "is adverse, punitive and coercive treatment," Mr. Kieselstein says. Other non-bankrupt carriers are not required to post security deposits.

Mr. Kieselstein explains that the Debtors will suffer irreparable injury in the absence of an injunction. The Debtors' operations require ongoing and uninterrupted access to PIA. If the Debtors are precluded from the PIA because they will not enter into a discriminatory lease, the airline will be operationally and economically wracked. The Debtors will lose customers, goodwill, future sales and market share. The Debtors need a preliminary injunction to prevent Portland from engaging in discriminatory conduct.

Headquartered in Chicago, Illinois, UAL Corporation --http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largestair carrier. The Company filed for chapter 11 protection onDecember 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $24,190,000,000in assets and $22,787,000,000 in debts.

US AIRWAYS: Inks Merger Pact with America West----------------------------------------------US Airways Group, Inc. (OTC Bulletin Board: UAIRQ) and America West Holdings Corporation (NYSE: AWA) disclosed an agreement to merge and create the first full-service nationwide airline, with the consumer-friendly pricing structure of a low-fare carrier. Operating as the first national low-cost hub-and-spoke network carrier, customers can look forward to simplified pricing, international scope, access to low-fare service to over 200 cities across the U.S., Canada, Mexico, the Caribbean and Europe, and amenities that include a robust frequent flyer program, airport clubs, assigned seating and First Class cabin service.

"Building upon two complementary networks with similar fleets, closely-aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline," America West Holdings Corporation Chairman, President and CEO Doug Parker said. "Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve. A combined US Airways/America West places the new airline in a position of strength and future growth that neither of us could have achieved on our own."

"US Airways has a strong franchise and great employees that will be enhanced by America West's strengths and success in the low-fare, low-cost marketplace," US Airways President and CEO Bruce Lakefield said. "That we have secured such an impressive slate of equity investors and partner support in a period of such industry uncertainty is a strong indication of the prospects and enthusiasm for this transaction. It has been my objective to ensure the long-term viability of US Airways and the security of our outstanding employees; this merger with America West will accomplish that objective."

Subject to approval by the U.S. Bankruptcy Court overseeing US Airways' pending Chapter 11 case and transaction closing, which is anticipated to occur this fall, the merged airlines will operate under the US Airways brand under the leadership of CEO Doug Parker. The merged airline's 13-member board will be comprised of:

-- one member from each of three new equity investment companies, -- six members from the current America West board, including Mr. Parker as chairman, and

-- four members from the current US Airways board, including Mr. Lakefield as vice-chairman.

The combined airline's headquarters will be consolidated into America West's headquarters in Tempe, Ariz. For regulatory purposes, both airlines will operate under separate operating certificates for a transition period of two to three years, keeping flight crew, maintenance and safety procedures for each airline separate. To ensure that the substantial consumer benefits are realized quickly, however, the airlines will work together to coordinate schedules, frequent flyer programs and other marketing programs as soon as practical.

"We believe that the airline created from the merger of US Airways and America West will bring more choices for customers, as we expand the low-fare pricing structure of America West to dozens of new cities, while also offering passenger-service amenities, such as an attractive frequent flyer program, assigned seating and a First Class cabin," Mr. Lakefield added.

Customers

With the creation of the first full-service nationwide airline, customers will enjoy simplified pricing across an expanded east/west network along with access to international destinations. Both airlines' frequent flyer programs will ultimately be combined once the merger is complete. Members of both programs will retain all of their miles and elite status designation and will receive similar benefits in the merged airline's frequent flyer program. Other customer amenities will include access to airport clubs, assigned seating and First Class upgrades.

Financing

The merger is expected to create one of the industry's most financially stable players, with over $10 billion in annual revenues and a strong balance sheet that includes approximately $2 billion in total cash at closing with which to weather the current industry environment and fund further growth strategies. The airline's strong cash balance is expected to be created through:

-- a combination of current cash on hand at US Airways/America West, -- $350 million of new equity commitments (which may be supplemented with additional commitments), and

-- Eastshore Holdings LLC, ($125 million commitment and agreement to provide regional airline services), which is owned by Air Wisconsin Airlines Corporation and its shareholders.

The merged company also plans to conduct a rights offering that could provide an additional $150 million of equity financing.

Approximately $675 million of additional cash financing is being secured through a combination of refunding of certain deposits, debt refinancing (which reduces collateralization) and signing bonuses from companies interested in long-term business relationships with the merged airline. The companies have signed commitments or firm proposals for more than $425 million in additional cash liquidity from strategic partners and vendors, including over $300 million in a signing bonus and a loan from prospective affinity credit card providers for the merged company. Negotiations with credit card companies are still in progress. Another $250 million will come from Airbus in the form of a loan. The companies have also agreed that the merged company will be the launch customer for the Airbus A350, with deliveries scheduled from 2011 to 2013.

Synergies

"We are exceptionally pleased with the financial support this transaction has received, but it would not be available if we did not have a business model that worked in today's difficult industry environment," said Mr. Parker. "We have created a competitive business that is profitable even with oil prices at $50 per barrel, achieved primarily because of the $600 million of annual net operating synergies. These synergies are higher than generally experienced in airline mergers for two reasons. First, US Airways and America West now have very similar labor costs so there are no large negative synergies related to contract integration, and second, US Airways' bankruptcy allows us to right-size capacity, thus increasing the network synergies."

The $600 million in anticipated annual synergies are the result of route restructuring, revenue synergies and cost savings. Route restructuring synergies of approximately $150-200 million are created by reducing aircraft and unprofitable flying, better matching aircraft size to consumer demand by route and incorporating Hawaii service into the network. Revenue synergies of $150-200 million are achieved by taking two largely regional airlines and creating one nationwide, low-cost carrier that can provide more choice for consumers when combined with improving connectivity across both airlines' networks and by increasing aircraft and other asset utilization. Lastly, the combined airline expects to realize cost synergies of $250-300 million annually by reducing administrative overhead, consolidating both airlines' information technology systems and combining facilities.

In addition to the operating synergies created by the merger, the new relationship with Air Canada provides for even greater operating improvements. The merged airline and Air Canada plan to work together to create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement, which could include codesharing with Air Canada, consistent with the U.S.-Canada bilateral aviation agreement.

Fleet/Route System

US Airways/US Airways Express currently serves 179 cities and America West/America West Express serves 96 cities. When merged, the combined airline will become the nation's fifth largest airline, as measured by domestic Available Seat Miles (ASMs). The combined airline is expected to operate a mainline fleet of 361 planes (supported by 239 regional jets and 57 turboprops for feed into the mainline system), down from a total of 419 mainline aircraft operated by both airlines at the beginning of 2005.

US Airways projects returning 25 additional aircraft by the end of 2006, in addition to the 46 aircraft that US Airways already has announced it plans to return. Nearly all of the aircraft are being returned to General Electric Capital Aviation Services (GECAS). The combined airline also will take delivery of 13 Airbus A320 family aircraft previously ordered by America West Airlines. Airbus has also agreed to reschedule and reconfirm 30 narrow body A320-family aircraft deliveries from 2006 - 2008 to 2009 - 2010. To rationalize international flying, the merged company will work with Airbus to transition to an all-Airbus international fleet of A330 aircraft and, beginning in 2011, A350 aircraft.

Once fully integrated, the airline plans to have primary hubs in Charlotte, Phoenix and Philadelphia, and secondary hubs in Las Vegas and Pittsburgh. The merged airline plans to have focus cities in Boston, New York/LaGuardia, Washington, D.C., and Fort Lauderdale.

People/Culture

US Airways currently employs 30,100 people and America West employs 14,000 people. Contract integration of represented employees is expected to occur after integrated seniority lists have been negotiated between each respective airline's labor groups.

"Although US Airways and America West are clearly two different airlines with two different cultures, our common traits far outnumber our differences," America West's Mr. Parker continued. "We are all aviation professionals proud of our heritage, eager to serve the traveling public and hopeful for the future. While seniority integration will be a challenge for us and our employees, we will ensure that those issues are discussed and resolved in a fair and equitable manner. Throughout this process, as has always been the case, we will continue our commitment of open and honest communication with our employees. We are building a new future that will present far greater job security and growth opportunities than either airline would have achieved on its own, and we are doing so with the ability for all to share in the collective upside."

Equity Allocation

The $350 million of private equity commitments are based upon a total implied private full equity value of $850 million for the merged corporation. Of that $850 million valuation, 45 percent will be allocated to America West, 41 percent to the new equity and 14 percent to US Airways. This valuation results in an implied value of $6.12 per share for the publicly traded America West stock, taking into effect dilution from outstanding warrants and options and the anticipated treatment of convertible securities. The partners have agreed that up to $650 million of total equity can be raised including any proceeds from planned a rights offering. Any additional equity would dilute all participants pro rata. However, any additional equity raised above $350 million will not reduce the $6.12 per share of implied value for the publicly traded America West stock. The right to participate in a rights offering for up to $150 million in common shares of the merged companies is to be allocated 61.5 percent to the stakeholders of US Airways and 38.5 percent to the common stockholders of America West.

Approvals

Under the terms of the agreement, the merger is expected to occur subsequent to confirmation of US Airways' plan of reorganization and emergence from Chapter 11. Because the merger and related equity investments are subject to US Airways' pending Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria, the transaction will also have to be approved by the U.S. Bankruptcy Court and will be subject to a competitive bidding process that will be proposed to the Court. The transaction, which has been approved by both company's boards of directors, is also subject to the approval of America West's shareholders.

Both airlines will file the necessary documents for review with the U.S. Department of Justice, the U.S. Department of Transportation and the Securities and Exchange Commission as well as secure other necessary regulatory approvals. In addition, both airlines hold loans with a federal guarantee from the Air Transportation Stabilization Board (ATSB), and the carriers are in joint negotiations with the ATSB on the treatment of those loans under the proposed merger.

US Airways Group, Inc., is being advised by Seabury Group LLC as restructuring advisor and financial advisor and the law firm of Arnold & Porter LLP; advisors for America West Holdings Corp. include Greenhill & Co., LLC as its principal financial advisor, Merrill Lynch & Co. as structuring advisor to certain financings, and the law firms of Skadden, Arps, Slate Meagher and Flom, LLP and Cooley, Godward LLP.

ALPA Issues Statement

US Airways MEC Chairman Captain Bill Pollock of the Air Line Pilots Association, Int'l said it will look into the proposed merger of the two companies. Capt. Pollock issued a statement, saying:

"US Airways Group, Inc. and America West Holdings Corporation have announced their intention to enter into a merger that would create both the nation's sixth-largest airline and the largest low-cost carrier network.

"The US Airways Master Executive Council (MEC), the pilots' governing body, will be analyzing the terms of this proposed transaction at the earliest opportunity.

"US Airways management believes that this proposed merger will enable US Airways to emerge from bankruptcy and then create a partnership that will be viable and competitive. I want management, our investors, and our flying public to know that the US Airways pilots are largely responsible for the progress that US Airways has made in its restructuring. US Airways enjoys this opportunity today because of the tremendous sacrifices made by our pilots. Our MEC and our pilots have been called upon again and again to make the most difficult decisions in this volatile and still-transforming industry. Our pilots have provided the Company with $7 billion in cost savings through four restructurings -- an investment far greater than any other group. We expect that our sacrifices will be respected as we welcome the opportunity to become a partner in the creation of this country's premier low-cost airline.

"We also look forward to working with the pilots of America West as we begin the process of combining pilot groups through the seniority integration procedures outlined in our ALPA Administrative Manual."

America West -- http://www.americawest.com/-- operates more than 900 flights daily to 95 destinations in the U.S., Canada, Mexico and Costa Rica. The airline's 13,500 employees are proud to offer a range of services including more destinations than any other low-cost carrier, first-class cabins, assigned seating, airport clubs and an award-winning frequent flyer program.

Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of:

Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts.

* * *

As reported in the Troubled Company Reporter on Apr. 25, 2005, Standard & Poor's Ratings Services placed selected ratings on America West Holdings Corp. and subsidiary America West Airlines Inc., including the 'B-' corporate credit rating on both, on CreditWatch with negative implications. Ratings on selected enhanced equipment trust certificates (EETCs) of America West Airlines Inc., which were placed on CreditWatch on Feb. 24, 2005, as part of an industry wide review of aircraft-backed debt, remain on CreditWatch.

"The CreditWatch placement is based on the potential combination of America West with US Airways Inc. (rated 'D'), the major operating subsidiary of US Airways Group Inc. (rated 'D'), both currently operating under Chapter 11 bankruptcy protection," said Standard & Poor's credit analyst Betsy Snyder. "The combination could present significant labor integration and financial challenges, depending on how any such combination is structured."

US AIRWAYS: Air Canada Parent to Invest $75 Million in Merger-------------------------------------------------------------ACE Aviation Holdings, the parent holding company of Air Canada and ACE's other subsidiaries, disclosed its intention to invest $75 million (approximately CAD$95) in the merged US Airways-America West carrier. Its investment will be made at the time of US Airways' exit from bankruptcy and in connection with a broad set of commercial and other arrangements between ACE and the newly-merged entity. ACE's investment will represent approximately 7% of equity, depending on the total amount of new equity capital raised by the merged entity. The newly-merged entity will be a well capitalized commercial partner with approximately $1.5 billion in forecast total liquidity, a competitive low cost structure and a route network that is highly complementary to Air Canada.

As a condition of its equity investment, ACE has obtained commitments which will result in five-year commercial agreements with the newly-merged entity regarding maintenance services, ground handling, regional jet flying, network, training, and other areas of cooperation. It is expected that ACTS and airport ground handling/facilities synergies will result in an estimated annual cash contributions of CAD $65 million.

ACE, through Air Canada Technical Services, is entitled to provide all available outsourced maintenance, repair and overhaul services for the merged entity with a combined fleet of 361 aircraft consisting of the Boeing 737, 757 and 767 and the Airbus A319, A320, A321 and A330 for which ACTS has significant existing expertise. This agreement will provide ACTS with a large volume of attractive new MRO work covering component and airframe maintenance. The new work will result in estimated additional revenues of CAD$1.5 billion for ACTS over the five-year term of the agreement. ACTS has the ability to undertake this work with a minimal capital investment of approximately $20 million utilizing capacity currently available at existing ACTS facilities. The agreement also includes the possibility of extending the work to cover engine maintenance and supply chain management.

"Our participation in the consolidation of the US airline industry through the merged US Airways - America West carrier is an exciting opportunity for ACE," said Robert Milton, Chairman, President and CEO of ACE Aviation Holdings Inc. "Doug Parker is one of the most capable airline leaders in the industry today and we look forward to working closely with Doug and his team to build an even stronger future for the new US Airways.

"Our investment in US Airways reflects not only our confidence in the viability of the merged carrier going forward but also represents a milestone in the implementation of ACE's business strategy to grow our business units into stand alone profitable companies," said Mr. Milton.

ACTS, a limited partnership of ACE, is a full-service MRO organization that provides airframe, engine and component maintenance and various ancillary services to a wide range of more than 100 global customers, including Air Canada, Air Canada Jazz, JetBlue, United Airlines, ABX, Mexicana, Snecma Services, Chromalloy, Lufthansa Technik, International Lease Finance Corporation (ILFC) and Canada's Department of National Defence. Montreal-based ACTS operates maintenance centers across Canada with a combined workforce of 3,600 employees and has major bases in Montreal, Toronto, Winnipeg, Calgary and Vancouver. The maintenance work for this agreement will be undertaken at ACTS facilities in Montreal, Winnipeg, Calgary and Vancouver creating an estimated 700 new jobs to be filled principally through employee recalls.

It is estimated that this agreement will propel ACTS to a position as one of the top three aircraft MRO providers worldwide in terms of sales. As a result, it is anticipated that by 2006, ACTS revenues will exceed $1 billion per annum with less than half being earned from Air Canada. This investment is consistent with ACE's strategic plan to grow its business units with an emphasis on third-party revenues.

"We look forward to the important synergy relationships that will benefit both the merged entity and Air Canada as a result of the ACE investment," said Doug Parker, America West Holdings Corporation Chairman, President and CEO. "ACTS is a world class MRO business, and we are pleased that they will be providing us a competitive service offering in this regard. Additionally, we are very excited about the potential traffic benefits pursuant from our enhanced network strength, and in the synergies that should accrue from ground handling and other initiatives."

Air Canada and the newly-merged entity will also implement a broad and cooperative strategy regarding airport facilities and ground handling which will provide mutual cost benefits and synergies and, more specifically, provide Air Canada with improved access to selected gates and facilities at a number of U.S. airports including New York's LaGuardia Airport, Boston's Logan Airport and Phoenix International Airport among others. ACE's regional air carrier, Jazz, will also potentially realize increased opportunities to partner with the newly-merged entity on transborder flying.

The agreements will provide both Air Canada and the merged carrier with significant network and operational benefits, including enhanced network strength and revenue opportunities in key transborder markets in the Southwestern U.S., Hawaii, Mexico and Florida. In particular, the new entity will provide Air Canada with enhanced access to key north-south markets where it does not currently have a significant presence most notably along the North American West Coast from Calgary, Edmonton and Vancouver to the U.S. Southwest and Mexico via the America West hubs at Phoenix and Las Vegas in addition to those markets on the U.S. East Coast served through the U.S. Airways hubs at Philadelphia and Charlotte. Furthermore, neither U.S. Airways nor America West currently operates Trans-Pacific flights while U.S. Airways operates a limited Trans-Atlantic offering. It is anticipated that Air Canada's Toronto and Vancouver hubs will benefit from increased traffic from the combined U.S Airways-America West networks. These network benefits complement the existing Air Canada relationship with United Airlines which provide Air Canada with a strong east-west presence through their hubs at Chicago O'Hare and Denver.

"It's a win-win all around as the merged airline and Air Canada will create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement, which will include codesharing between the two carriers," said Mr. Milton. "The addition of America West to our current network relationship with USAirways will strengthen Air Canada's position as a highly connected global network and provide the newly-merged carrier with enhanced access to Canada and Air Canada's international network via the Toronto and Vancouver hubs. It will also provide an important benefit to the Star Alliance by significantly increasing its network penetration in the Western United States.

ACE is the parent holding company of Air Canada and ACE's other subsidiaries. Air Canada is Canada's largest domestic and international full- service airline and the largest provider of scheduled passenger services in the domestic market, the transborder market and each of the Canada-Europe, Canada-Pacific, Canada-Caribbean/Central America and Canada-South America markets. Air Canada is a founding member of the Star Alliance network, the world's largest airline alliance group.

In addition, the Corporation owns Jazz Air LP, Aeroplan LP and Destina.ca , which is an on-line travel site. The Corporation also provides Technical Services through ACTS LP, Cargo Services through AC Cargo LP and Air Canada, Groundhandling Services through ACGHS LP and Air Canada and tour operator services and leisure vacation packages through Touram LP.

America West -- http://www.americawest.com/-- operates more than 900 flights daily to 95 destinations in the U.S., Canada, Mexico and Costa Rica. The airline's 13,500 employees are proud to offer a range of services including more destinations than any other low-cost carrier, first-class cabins, assigned seating, airport clubs and an award-winning frequent flyer program.

Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of:

Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts.

* * *

As reported in the Troubled Company Reporter on Apr. 25, 2005, Standard & Poor's Ratings Services placed selected ratings on America West Holdings Corp. and subsidiary America West Airlines Inc., including the 'B-' corporate credit rating on both, on CreditWatch with negative implications. Ratings on selected enhanced equipment trust certificates (EETCs) of America West Airlines Inc., which were placed on CreditWatch on Feb. 24, 2005, as part of an industry wide review of aircraft-backed debt, remain on CreditWatch.

"The CreditWatch placement is based on the potential combination of America West with US Airways Inc. (rated 'D'), the major operating subsidiary of US Airways Group Inc. (rated 'D'), both currently operating under Chapter 11 bankruptcy protection," said Standard & Poor's credit analyst Betsy Snyder. "The combination could present significant labor integration and financial challenges, depending on how any such combination is structured."

US AIRWAYS: Wants to Implement Transaction Retention Plan---------------------------------------------------------According to US Airways, Inc., and its debtor-affiliates, their employees have worked diligently throughout the restructuring period without improvement in their employment contracts and key employee retention programs. All levels of the Debtors' management have participated in the cost reduction initiatives, Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, tells Judge Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia.

Mr. Leitch notes that the Debtors' reorganization is at acritical phase. "The confluence of industry losses, acompetitive job market, the attractiveness of Debtors' employeesand public speculation about the Debtors' future have thinned themanagement ranks. The discussions with America West HoldingsCorp. on a potential strategic transaction have exacerbated theDebtors' employment challenges. These events may cause importantManagement and Salaried Employees to unexpectedly leave theDebtors' ranks. The Debtors will be in grave danger if theystart losing critical employees in accelerated and unplannedfashion." As many Management and Salaried Employees will becritical to the Debtors, whether or not a strategic transactiongoes forward, the Debtors have developed a Transaction RetentionPlan.

Mr. Leitch explains that the TRP is designed to retain essentialManagement and Salaried Employees during the entire strategictransaction process or other change of control. The TRP covers25 officers and 1,873 Management and Salaried Employees. TheManagement and Salaried Employees range from around 40 ManagingDirectors to several hundred analyst and sole contributorpositions, including Accountants, Payroll Analysts and ConsumerAffairs Representatives:

A strategic transaction would be good news for the Debtors, theircreditors, their customers, and the majority of their unionizedemployees, Mr. Leitch says. But a transaction would be mixednews for the Debtors' officers and Management and SalariedEmployees, which would be affected by workforce reductions,according to Mr. Leitch. To be successful, Mr. Leitch says, anyreduction in Management and Salaried Employees pursuant to astrategic transaction would have to be orderly and timely."Otherwise there will be disruptions in the business operations."Mr. Leitch points out that the success of a transaction willpartially depend on a smooth and efficient integration processthat maintains operating and financial performance and preservescustomer goodwill. "Unplanned, substantial employee departuresmay cripple the airline and destroy the economic value in atransaction."

The TRP has three components:

1) Officers and Presidents: the Chief Executive Officer, five Executive Vice Presidents, four Senior Vice Presidents and 13 Vice Presidents, plus the presidents of PSA and Piedmont are included in the TRP.

The New Employment Contracts provide lower benefits than the executives' current unassumed contracts. Because some of these executives may not be offered employment after a strategic transaction, the Contracts provide severance as an incentive to remain with the Debtors, rather than seek employment now with other companies. The TRP targets executives whose institutional knowledge and skills are critical to any strategic transaction.

The executives covered by this portion of the TRP are the Debtors' most senior and seasoned management. Their experience and stature will be vital to the transaction process, yet these qualities make the executives attractive to competitors. The TRP will provide an incentive to these executives to remain with the Debtors through a transaction and its implementation.

Due to many uncertainties, it is difficult to estimate the likely actual cost of this portion of the TRP. The highest estimate is $18,000,000 if every one of the 25 executives were terminated. If one-third of these executives receive severance, the Debtors may pay out $6,000,000.

2) Management and Salaried Employees: the TRP clarifies and expands the existing severance policies for Management and Salaried Employees. The severance policies will assure the covered employees that if their position is eliminated in a strategic transaction or change of control, they will receive severance.

The majority of the Management and Salaried Employees do not have specific contracts regarding severance, so the existing severance policies will be amended to clarify that severance will be provided even if the employee is terminated due to a change in control. The amended policy will provide for three months severance for employees who are involuntarily terminated. Additional severance may be accrued based on length of service, up to 52 weeks of severance for Managing Directors after 15 years, and 26 weeks, after 20 years, for Management and Salaried Employees. Employees that leave voluntarily will receive no severance.

It is difficult to estimate the number of Management and Salaried Employees that will receive severance benefits. If all eligible employees receive severance, the Debtors will pay around $32,000,000. It is more likely that one-third of eligible employees will be paid severance benefits at a cost of $10,300,000, depending on employee mix.

The Debtors need to provide valuable Management and Salaried Employees with a reason to remain through a strategic transaction. Without 12 weeks of base pay in a change of control situation, many of the key Management and Salaried Employees will not remain through a transition period for which they are needed. Instead, they will seek new employment quickly.

3) The Retention Payment Program: US Airways' Chief Executive Officer or his designee may offer discretionary payments to particular Management and Salaried Employees. This program will encourage critical employees to work for the restructured entity to ensure a smooth integration. The targeted employees have little prospect of long-term employment at the restructured entity. However, the Debtors need their services through implementation of a strategic transaction.

The severance policies may not be enough to retain certain employees through the phase-out of overlapping jobs. When an employee's severance is not adequate to persuade them to stay with the Debtors, the retention payment feature of the TRP will allow the Debtors to provide discretionary retention payments to entice the employee to remain with the Debtors until a certain date. The total payments to employees will range from $2,500 to $25,000, subject to a cap of $50,000. This feature will not cost the Debtors more than $5,000,000.

Mr. Leitch relates that the cost of the TRP is reasonable basedon information from the Debtors' business experience and theircompensation expert. "The TRP is in line with severancecompensation offered in the airline industry and with Chapter 11retention programs."

Headquartered in Arlington, Virginia, US Airways' primary businessactivity is the ownership of the common stock of:

Under a chapter 11 plan declared effective on March 31, 2003,USAir emerged from bankruptcy with the Retirement Systems ofAlabama taking a 40% equity stake in the deleveraged carrier inexchange for $240 million infusion of new capital.

VISTEON CORP: Names D. Stebbins as Pres. & Chief Operating Officer ------------------------------------------------------------------Mike Johnston, chairman-elect and chief executive officer of Visteon Corporation (NYSE: VC) reported the appointment of Donald J. Stebbins, 47, to president and chief operating officer, effective May 23, 2005. Mr. Stebbins joins Visteon with over 20 years of leadership experience and a solid history of performance in managing global business issues. Reporting to Mr. Johnston, he will be responsible for Visteon's global operations including manufacturing, sales, purchasing, product development and quality.

"This is a great time for Don to join our leadership team as we take steps to increase Visteon's competitiveness in the marketplace," said Mr. Johnston. "Don is a highly-regarded leader with a great reputation at a well-respected company. His operational experience and financial expertise combine for a great foundation from which to drive the restructuring planning underway."

Mr. Stebbins joins Visteon from Lear Corporation where he was president and chief operating officer of Lear's operations in Europe, Asia and Africa. Prior to this appointment, Mr. Stebbins was president and chief operating officer of Lear's operations in the Americas. Mr. Stebbins joined Lear in 1992 as vice president and treasurer. He has held various financial positions of increasing responsibility throughout the first nine years with Lear including a 1997 promotion to senior vice president and chief financial officer. Prior to joining Lear, Mr. Stebbins held positions at Bankers Trust Company and Citibank.

Mr. Stebbins holds a bachelor of science degree in finance from Miami University in Oxford, Ohio and a master's degree in business administration from the University of Michigan in Ann Arbor, Michigan.

About the Company

Visteon Corporation is a leading full-service supplier that delivers consumer-driven technology solutions to automotive manufacturers worldwide and through multiple channels within the global automotive aftermarket. Visteon has about 70,000 employees and a global delivery system of more than 200 technical, manufacturing, sales and service facilities located in 24 countries.

* * *

As reported in the Troubled Company Reporter on May 13, 2005, Moody's Investor Service has lowered the senior implied and senior unsecured ratings of Visteon Corporation to B3 from B1 and the Speculative Grade Liquidity Rating to SGL-4 from SGL-3.

The actions follow a recent announcement from the company that it will delay the filing of its quarterly report on Form 10-Q for its first quarter of 2005 due to the recent identification of errors in its accruals for costs principally associated with freight and material surcharges that relate to prior periods. In addition, the Audit Committee of Visteon's Board of Directors has determined that the company will conduct an independent review of the accounting for certain transactions originating in the company's North American purchasing activity.

Also, Standard & Poor's Ratings Services lowered its corporate credit rating on Visteon Corp. to 'B-' from 'B+'. The action reflects concerns about Visteon's liquidity and ongoing viability after it announced that its cash flow from operations will be insufficient to fund obligations in 2005. The company also faces bank covenant violations. And it has delayed the filing of its first quarter 10-Q because of an internal review of certain accounting errors. This delay could eventually limit the company's access to its bank credit facilities.

Fitch is affirming the 'AAA' rating of the class A certificates (approximately $224 million). The upgrades, affecting approximately $15 million of the outstanding balances, are being taken as a result of low delinquencies and losses, as well as increased credit support levels. To date, WAMU 2002-AR2 has a very low cumulative loss of $259 million and all of the rated classes have experienced an increase in credit enhancement percentage 2.5 times the original. Delinquency figures have been relatively stable, with loans delinquent for 90 days or higher comprising less than 1% of the scheduled pool balance every month since origination. The percentage of loans that are 30 days delinquent has been fluctuating and increased to as high as around 15% of the scheduled pool balance in March 2005. However, they do not have a roll over effect on the higher delinquency buckets.

The collateral of the WAMU 2002-AR2 consists of 15- to 40-year adjustable-rate mortgages that were purchased from trusts established in connection with the issuance of the Home Savings of America, FSB, series 1993-4 and the Home Savings of America, FSB, series 1994-1 by Washington Mutual, FA. The pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) of this deal is 28%.

Further information regarding current delinquency, loss and credit enhancement statistics is available on the Fitch Ratings web site at http://www.fitchratings.com/

WESBURY UNITED: Fitch Lowers Series 1999 Revenue Bonds to BB------------------------------------------------------------Fitch Ratings has downgraded the rating on the outstanding $14,155,000 Crawford County Hospital Authority Senior Living Facilities revenue bonds, (Wesbury United Methodist Obligated Group Issue), series 1999 to 'BB' from 'BBB-'. The Rating Outlook is Stable.

The downgrade reflects Wesbury United Methodist Community's continued decline in profitability and liquid reserves. Wesbury has used internal cash flow to fund renovations to the nursing center resulting in days cash on hand declining to 118 at Dec. 31, 2004, down from 200 days at Dec. 31, 2000. Moreover, profitability has been impaired by nursing beds being taken out of service and a reduction in per diem nursing rates in 2004 from 2003. Management expects to continue to fund renovation over the near term from operations, which may hamper Wesbury's ability to build cash. In 2004, excess margin was 0.2%, an improvement from 2003 results. Debt service coverage fell to 1.6 times in 2004 from 2.0x in 2003 as entrance fee receipts were down from the year earlier period. First-quarter financial results are below budget but should rebound with the expected receipt of Medicaid settlements.

Despite the above-mentioned concerns, Fitch believes Wesbury's demand for services remains a credit strength. Wesbury has limited competition in its market area and continues to maintain high occupancy levels. Moreover, Wesbury expects to benefit from the provider tax on nursing beds in Pennsylvania.

The Stable Outlook reflects the expectation that reimbursement rates for nursing services will remain stable over the near term. This, along with continued high occupancy levels, should allow Wesbury to return to profitability and adequately meet debt service obligations. However, further deterioration in Wesbury's liquidity position may exert downward pressure on the rating.

Wesbury United Methodist Community is a Type B continuing care retirement community with 59 independent living villas, 16 independent living apartments, 122 assisted living beds, 210 skilled nursing beds, and a freestanding 37-bed assisted living facility located in Meadville, Pennsylvania (30 miles south of Erie, Penn.). Wesbury covenants to provide audited annual financial statements and quarterly unaudited financials to bondholders and the Trustee consisting of income statements, balance sheets, cash flow information, and changes in net assets. Fitch notes that disclosure by Wesbury has been timely and has also included utilization statistics.

WINN-DIXIE: U.S. Trustee Objects to Some Employment Applications----------------------------------------------------------------Felicia S. Turner, United States Trustee for Region 21, objects to the employment applications filed by the Official Committee of Unsecured Creditors of Winn-Dixie Stores, Inc., and its debtor-affiliates:

Both Skadden and Smith Hulsey, the U.S. Trustee explains, have a conflict that precludes them from diligently representing the Debtors in regards to Wachovia Bank, NA. The U.S. Trustee has filed a request for reconsideration of the order authorizing employment of Smith Hulsey & Busey. The U.S. Trustee believes that if the Motion for Reconsideration is granted, and the employment of Smith Hulsey is not approved, the Debtors will be able to find a firm that can adequately represent their interests with regards to Wachovia without the need for hiring a third counsel. Hiring additional counsel to perform services normally provided by main counsel results in unnecessary costs to the Debtors, the U.S. Trustee says.

The U.S. Trustee also objects to the Debtors' employment of Carlton Fields, P.A., as special real estate litigation counsel. The U.S. Trustee believes that previously retained counsel are qualified and able to handle the very limited matters for which it seeks to retain Carlton Fields.

Moreover, the U.S. Trustee asserts that the Debtors' proposed terms of retention and compensation of these firms do not comport with the requirements of Sections 327 and 330 of the Bankruptcy Code:

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the SoutheasternUnited States and in the Bahamas and employs approximately 90,000people. The Company, along with 23 of its U.S. subsidiaries,filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.Case No. 05-11063). The Honorable Judge Robert D. Drain orderedthe transfer of Winn-Dixie's chapter 11 cases from Manhattan toJacksonville. On April 14, 2005, Winn-Dixie and its debtor-affiliates filed for chapter 11 protection in M.D. Florida (CaseNo. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden ArpsSlate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., andBrian C. Walsh, Esq., at King & Spalding LLP, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $2,235,557,000 intotal assets and $1,870,785,000 in total debts. (Winn-DixieBankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,Inc., 215/945-7000).

WINN-DIXIE: Wants to Extend Reclamation Deadline to June 30-----------------------------------------------------------The U.S. Bankruptcy Court for the Middle District of Florida directed Winn-Dixie Stores, Inc., and its debtor-affiliates "to file within ninety days after the Petition date, or such later date as may be established by the Court upon the motion of the Debtors" a statement of reclamation setting forth "the extent and basis, if any upon which the Debtors believe the underlying Reclamation Claims is not factually or legally valid."

The 90-day period to file a Statement of Reclamation expires on May 23, 2005.

The Debtors or any other party-in-interest was also required to file Value Notices within 60 days after the entry of the FinalReclamation Order. The 60-day period to file Value Notices expires on June 3, 2005.

By this motion, the Debtors ask the Court to extend the deadline to file any Statement of Reclamation or Value Notices to June 30, 2005.

The Debtors are negotiating with a number of holders of Reclamation Claims in an effort to resolve the claims consensually and to avoid the time, expense and inherent risk involved in any litigation.

Absent an extension, the Debtors will be required to expend substantial time and resources preparing the Statement of Reclamation and Value Notices, rather than focusing on resolving the Reclamation Claims.

Reclamation Claimants Support Request

Several holders of Reclamation Claims agree to the extension. Based on their experience in similar bankruptcy cases involving the resolution of similar issues with respect to Reclamation Claims, the Reclamation Claimants believe it will be beneficial to all constituencies for these efforts to proceed with the Debtors' representatives, the Official Committee of Unsecured Creditors and the Trade Vendors working together for the development of a process to resolve Reclamation Claims and to address certain other trade issues.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the SoutheasternUnited States and in the Bahamas and employs approximately 90,000people. The Company, along with 23 of its U.S. subsidiaries,filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.Case No. 05-11063). The Honorable Judge Robert D. Drain orderedthe transfer of Winn-Dixie's chapter 11 cases from Manhattan toJacksonville. On April 14, 2005, Winn-Dixie and its debtor-affiliates filed for chapter 11 protection in M.D. Florida (CaseNo. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden ArpsSlate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., andBrian C. Walsh, Esq., at King & Spalding LLP, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $2,235,557,000 intotal assets and $1,870,785,000 in total debts. (Winn-DixieBankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,Inc., 215/945-7000).

WINN-DIXIE: Wants to Pay PACA Claims Without Further Delay----------------------------------------------------------On March 22, 2005, the U.S. Bankruptcy Court for the Southern District of New York granted Winn-Dixie Stores, Inc., and its debtor-affiliates authority to pay prepetition claims arising under the Perishable Agricultural Commodities Act and the Packers and Stockyard Act.

The procedures established by the PACA Order require the Debtors to file a Report with the Court setting forth the status and information on the PACA Claims.

The Debtors and their professionals have devoted a significant amount of time and effort to reviewing, analyzing, and paying many of the PACA Claims. In total, the Debtors received notices from 118 Claimants asserting PACA Claims, in aggregate, of approximately $32 million. As of May 6, 2005, the Debtors have paid 81 Allowed PACA Claims totaling $19,625,035. In addition, the Debtors intend to pay 18 additional Claimants asserting $3,224,551 in Allowed PACA Claims.

A list of those Claimants that held an Allowed PACA Claim and to whom payment in full has been made is available for free at:

The Debtors found certain PACA Claims that have reconciled and unreconciled portions. The Debtors intend to pay the valid portions without further delay. The Debtors will continue to discuss with the claimants the unreconciled portions of those claims. A list of those claims is available for free at:

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. --http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the SoutheasternUnited States and in the Bahamas and employs approximately 90,000people. The Company, along with 23 of its U.S. subsidiaries,filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y.Case No. 05-11063). The Honorable Judge Robert D. Drain orderedthe transfer of Winn-Dixie's chapter 11 cases from Manhattan toJacksonville. On April 14, 2005, Winn-Dixie and its debtor-affiliates filed for chapter 11 protection in M.D. Florida (CaseNo. 05-03817 to 05-03840). D.J. Baker, Esq., at Skadden ArpsSlate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., andBrian C. Walsh, Esq., at King & Spalding LLP, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $2,235,557,000 intotal assets and $1,870,785,000 in total debts. (Winn-DixieBankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,Inc., 215/945-7000).

* BOOK REVIEW: The Rise and Fall of the Conglomerate Kings----------------------------------------------------------Author: Robert SobelPublisher: Beard BooksSoftcover: 240 pagesList Price: $34.95

The marvelous thing about capitalism is that you, too, can be a Master of the Universe. If you are of a certain age, you will recall that is the name commandeered by Wall Street bond traders in their Glory Days. Being one is a lot like surfing: you have to catch the crest of the wave just right or you get slammed into the drink, and even the ride never lasts forever. There are no Endless Summers in the market.

This book is the behind-the-scenes story of the financial wizards and bare-knuckled businessmen who created the conglomerates, the glamorous multi-form companies that marked the high noon of post-World War II American capitalism. Covering the period from the end of the war to 1983, the author explains why and how the conglomerate movement originated, how it mushroomed, and what caused its startling and rapid decline. Business historian Robert Sobel chronicles the rise and fall of the first Masters of the Universe in the U.S. and describes how the era gave rise to a cadre of imaginative, bold, and often ruthless entrepreneurs who took advantage of a buoyant stock market to create giant enterprises, often through the exchange of overvalued paper for real assets. He covers the likes of Royal Little (Textron), Text Thornton (Litton Industries), James Ling (Ling-Temco-Vought), Charles Bludhorn (Gulf & Western) and Harold Geneen (ITT). This is a good read to put the recent boom and bust in a better perspective.

While these men had vastly different personalities and processes, they had a few things in common: ambition, the ability to seize opportunities that others were too risk-averse to take, willing bankers, and the expansive markets of the 1960s. There is something about an expansive market that attracts and creates Masters of the Universe. The Greek called it hubris.

The author tells a good joke to illustrate the successes and failures of the period. It seems the young son of a Conglomerateur brings home a stray mongrel dog. His father asks, "How much do you think it's worth?" To which the boy replies, "At least $30,000." The father gently tries to explain the market for mongrel dogs, but the boy is undeterred and the next afternoon proudly announces that he has sold the dog for $50,000. The father is proudly flabbergasted, "You mean you found some fool with that much money who paid you for that dog?" "Not exactly," the son replies, "I traded it for two $25,000 cats."

While it lasted, the conglomerate struggles were a great slugfest to watch: the heads of giant corporations battling each other for control of other corporations, and all of it free from the rubric of "synergy." Nobody could pretend there was any synergy between U.S. Steel and Marathon Oil. This was raw capitalist power at work, not a bunch of fluffy dot.commies pretending to defy market gravity.

History repeats itself, endlessly, because so few people study history. The stagflation of the 1970s devalued the stock of conglomerates and made it useless a currency to keep the schemes afloat. The wave crashed and waiting on the horizon for the next big wave: the LBO Masters of the 1980s.

Robert Sobel was born in 1931 and died in 1999. He was a prolific chronicler of American business life, writing or editing more than 50 books and hundreds of articles and corporate profiles. He was a professor of business history at Hofstra University for 43 years and he a Ph.D. from NYU.

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Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test.

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For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852.

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